Missing Amounts From Financial Statements The financial statements at the end of
ID: 2606686 • Letter: M
Question
Missing Amounts From Financial Statements
The financial statements at the end of Paradise Realty's first month of operations are shown below.
Instructions:
1. Would you classify a realty business such as Paradise Realty as a manufacturing, merchandising, or service business?
2. By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers.
1 more Check My Work uses remaining.
PARADISE REALTYIncome Statement
For the Month Ended November 30, 20Y3 Fees earned $149,300 Operating expenses: Wages expense $ (a) Rent expense 14,400 Supplies expense 12000 Utilities expense 8,100 Miscellaneous expense 4,950 Total operating expenses (69,300) Net income $ (b)
Explanation / Answer
Answer to Part 1.
Paradise Reality is a Service Business, as the Revenue generated during the year is Fee, which is due to Services rendered.
Answer to Part 2.
Answer a.
Total Operating Expenses = Wages Expense + Rent Expense + Supplies Expense + Utilities Expense + Miscellaneous Expense
$69,300 = (a) + $14,400 + $12,000 + $8,100 + $4,950
(a) = $29,850
Answer b.
Net Income = Fees Earned - Total Operating Expenses
(b) = $149,300 - $69,300
(b) = $80,000
Answer c.
Net Income = $80,000
(c) = $80,000
Answer d.
Total Balances, Nov. 30, 20Y3 = Total Balances, Nov. 1, 20Y3 + Issuance of Common Stock + Net Income - Dividend
$314,000 = $0 + $270,000 + $80,000 - (d)
(d) = $36,000
Answer e.
Retained Earnings Balances, Nov. 30, 20Y3 = Retained Earnings Balances, Nov. 1, 20Y3 + Net Income – Dividend
(e) = $0 + $80,000 - $36,000
(e) = $44,000