Land $ $ $ 12,500 Note payable Property tax expense 8,000 2.000 Rent expense 8,200 Equipment...

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Land $ $ $ 12,500 Note payable Property tax expense 8,000 2.000 Rent expense 8,200 Equipment 32,500 Interest expense 2,350 In

a. Was Monroe Services profitable during 2020? By how much? (Use a minus sign or parentheses for a net loss.) Monroe Services

business accounting

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Answer 1

Answer #1

a)Monroe services was profitable with a net profit /(loss )of $ 82050

Service revenue	156000
less:Expenses
property tax expense	(2350)
Rent expense	(16500)
utilities expense	(3600)
Interest expense	(8000)
salary expense	(43500)
Net income /(loss)	82050

b)Retained earning increases by $ 48050 after paying dividend to shareholders of $ 34000 [82050-34000= 48050]

c)Total liabilities = Note payable +accounts payable+interest payable

= 32500+15500+2000

= 50000

Total equity = common stock+retained earning

= 20000+116000 [Retained earning = beginning 67950 +48050 increase = 116000]

= 136000

Total equity exceeds total liabilities by 136000-50000= 86000. shareholders own more of Monroe services assets.

As CEO ,You should be pleased with the results of monroe services because company earned a net profit

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Answer 2

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