Question

Credit $ Debit 5,500 24,000 8,700 7,400 60,000 $ 30,000 168,000 56,000 53,680 No. Account Title 101 Cash 104 Short-term investments 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 173 Building 174 Accumulated depreciation-Building 183 Land 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 233 Unearned professional fees 244 Current portion of long term note payable 251 Long-term notes payable 307 Common stock 318 Retained earnings 319 Dividends 401 Professional fees earned 406 Rent earned 407 Dividends earned 409 Interest earned 606 Depreciation expense-Building 612 Depreciation expense-Equipment 623 Wages expense 633 Interest expense 637 Insurance expense 640 Rent expense 652 Supplies expense 682 Postage expense 683 Property taxes expense 684 Repairs expense 688 Telephone expense 690 Utilities expense Totals 15,000 2,500 3,300 2,400 1,400 7,900 8,000 59,000 5,500 123,400 10,600 100,000 16,000 2,000 2,200 12,320 9,000 26,000 3,300 7,100 11,200 5,400 3,300 4,900 6,800 3,200 4,200 $434,600 $434,600

Answer 1

Caluclation of Retained earning
Retained Earining = Opening Retained Earning + Net Income during the year - Dividend paid or declaraed
=123400 + 23480 -10600
136280
Working Note 1: Net Income during the year
Professional fees received	100000
Add: Other Income
Rent Earned	16000
Dividends Earned	2000
Interest EARNED	2200
Total Revenue	120200
Less: Operating Expenses
Depreciation Building	12320
Depreciation Equipment	9000
Wages Exp.	26000
Interest Exp.	3300
Insurance	7100
Rent	11200
Supplies	5400
Postage	3300
Property taxes	4900
repairs	6800
Telephone	3200
Utilities expenses	4200
Total Operating Expenses	96720
Net Operating income	23480