Question

The balances of Paradise Travel Service’s accounting equation items for the year ended May 31, 2018, are listed below. $29,000 of dividends were paid during the year. Retained earnings as of June 1, 2017, was $579,000. Accounts Fees earned $1,470,000 Office expense 309,000 Miscellaneous expense 26,000 Wages expense 807,000 Accounts payable 62,500 Accounts receivable 182,000 Cash 316,000 Common stock 30,500 Land 459,000 Supplies 14,000 Prepare a balance sheet as of May 31, 2018. Refer to the lists of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.

Answer 1

Paradise Travel Service

Balance Sheet

May 31,2018

Assets:

Cash $316,000

Accounts receivable $182,000

Supplies $14,000

Land $459,000

Total Assets $971,000

Liabilities and Stockholders' Equity:

Accounts payable $62,500

Common stock $30,500

Retained earnings $878,000

Total Liabilities and Equity $971,000

Step-by-step explanation:

Retained earnings = retained earnings 2017 - dividends = $579,000 - $29,000 = $550,000 + $328,000 (net income 2018) = $878,000

Accounts Fees earned $1,470,000

- Office expense 309,000

- Miscellaneous expense 26,000

- Wages expense 807,000

net income = $328,000