Question

The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow:

Fees earned $975,760
Office expense 224,425
Miscellaneous expense 19,515
Wages expense 468,365
Accounts payable 24,395
Accounts receivable 68,300
Cash 256,740
Common stock 135,000
Land 312,000
Supplies 11,710
Cash dividends of $37,100 were paid during the year. Retained earnings as of June 1, 20Y5, were $263,000.
Prepare the balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.

Answer 1

Paradise Travel Service

Balance Sheet as at May 31, 20Y6.

ASSETS

Non - Current Assets

Land 312,000

Total Non - Current Assets 312000

Current Assets

Supplies 11,710

Accounts receivable 68,300

Cash 256,740

Total Current Assets 336750

TOTAL ASSETS

EQUITY AND LIABILITIES

EQUITY

TOTAL EQUITY

LIABILITIES

Non - Current Liabilities

Total Non - Current Liabilities

Current Liabilities

Accounts payable 24,395

Total Current Liabilities

TOTAL LIABILITIES

EQUITY

Common stock 135,000

Retained Earnings 468,365

TOTAL EQUITY 603365

TOTAL EQUITY AND LIABILITIES

Step-by-step explanation:

Profit = Sales - Expenses

= $975,760 - (224,425 + 19,515 + 468,365)

= $263,455

Retained Earnings Calculation

Opening Balance $263,000

Add Profit for the Year $263,455

Less Dividends ($37,100)

Ending Balance $489,355