Following are the amounts of the assets and liabilities of New World Travel Agen
ID: 2503131 • Letter: F
Question
Following are the amounts of the assets and liabilities of New World Travel Agency at December 31, 2012, the end of the current year, and its revenue and expenses for the year. The retained earnings was $105,000 on January 1, 2012, the beginning of the current year. During the current year, dividends of $10,000 were paid.
Accounts Payable
$25,000
Rent Expense
$46,000
Accounts Receivable
60,000
Supplies
5,000
Capital Stock
15,000
Supplies Expense
3,000
Cash
110,000
Utilities Expense
18,000
Fees Earned
200,000
Wages Expense
90,000
Miscellaneous Expense
4,000
1. Prepare an income statement for the current year ended December 31, 2012.
2. Prepare a retained earnings statement for the current year ended December 31, 2012.
3. Prepare a balance sheet as of December 31, 2012. When entering assets, enter them in order of liquidity.
4. What item appears on both the retained earnings statement and the balance sheet?
Accounts Payable
$25,000
Rent Expense
$46,000
Accounts Receivable
60,000
Supplies
5,000
Capital Stock
15,000
Supplies Expense
3,000
Cash
110,000
Utilities Expense
18,000
Fees Earned
200,000
Wages Expense
90,000
Miscellaneous Expense
4,000
Explanation / Answer
I believe some information is missing as the numbers given do not balance. It is off by 1,000 and I am assuming it is somewhere on the income statement, there may be an expense that is not listed.
New World Travel Agency
Income Statement
For the period ended December 31, 2012
Revenue:
Total Revenue 200,000
Expenses:
Rent Expense 46,000
Wages Expense 90,000
Utilities Expense 18,000
Supplies Expense 3,000
Miscellaneous Expense 4,000
Total Expenses 161,000
Net Income (Loss) 39,000
New World Travel Agency
Balance Sheet
December 31, 2012
Assets:
Cash 110,000
Supplies 5,000
Accounts Receivable 60,000
Total Assets: 175,000
Retained Earnings 134,000
Total Equity 149,000
New World Travel Agency
Statement of Retained Earnings
For the Year Ending December 31, 2012
Retained earnings