Question

Paid creditors on account $1,100 Paid office strips $4.000 Supplies Billed customers for fees earned for managing rental Paid automobile expenses for month, $750 and miscellaneous expe Determined that the cost of supplies on hand was $250 therefore, the cost of supplies used was 51,550 1. Indicate the effect of each transaction and the balances after each transaction, using the Briefly explain why issuing common stock and revenues increased stock et Income The assets and liabilities of Global Travel Agency on December 31, 2015, and its reven d Paid rent on office an e. h Paid dividends. $5,000 Instructions ing tabular headings Assets =Liabilities + Accounts Accounts + Receivable + Supplies - Payable + 2. PR 1-2A Financial statements Auto Expense Common Stock Stockholders' Equity Fees Rent Salaries Dividends + Eamed - Expense - Expense - Expense - barquity, while dividends and expenses decreased stockholders' equity. 4. How much did April's transactions increase or decrease stockholders' equity? $402,000 expenses for the year are as follows: Accounts payable $ 108,000 Accounts receivable 539,000 A Casti 200,000 Common stock 575,000 Fees earned 940,000 Land 1,500,000 Miscellaneous expense Rent expense Supplies Supplies expense Utilities expense Wages expense $ 19,500 56,000 6,000 12,700 34,800 415,000 CEL TEMPLATE Common stock was $525,000 and retained earnings was $1,250,000 as of January 1, 20Y5. Dune the year, additional common stock of $50,000 was issued for cash, and dividends of $90.00 were paid Instructions 1. Prepare an income statement for the year ended December 31, 20Y5. 2. Prepare a statement of stockholders' equity for the year ended December 31, 2045. 3. Prepare a balance sheet as of December 31, 2045. 4. What items appears on both the statement of stockholders' equity and the balance sheet? PR 1-3A Financial statements ome: Seth Feye established Reliance Financial Services on July 1, 20Y2. Reliance Financial Services ,200 financial planning advice to its clients. The effect of each transaction and the balances after transaction for July follow:

Answer 1

Answer 1

Global Travel Agency
Income Statement
For the Year ended Dec 31, 20Y5
Revenue
Fees earned		$          940,000
Less: Expense
Rent expense	$          56,000
Supplies expense	$          12,700
Utilities Expense	$          34,800
Wages expense	$       415,000
Miscellaneous Expense	$          19,500
Total Expense		$          538,000
Net Income		$          402,000

Answer 2

Global Travel Agency
Statement of stockholder's equity
For the Year ended Dec 31, 20Y5
	Common stock	Retained earnings	Total stockholder's equity
Beginning balance	525,000	1,250,000	1,775,000
Issued of shares	50,000		50,000
Add: net income		402,000	402,000
Less: Dividends		(90,000)	(90,000)
Ending balance	575,000	1,562,000	2,137,000

Answer 3

Global Travel Agency
Balance sheet
Dec 31, 20Y5
Assets
Current assets
Cash	$       200,000
Account receivable	$       539,000
Supplies	$            6,000
Total Current assets		$          745,000
Property, pant and equipment
Land		$      1,500,000
Total assets		$      2,245,000
Liabilities and owner's Equity
Current liabilities
Account payable	$       108,000
Total Current liabilities		$          108,000
Stockholder's equity
Common stock	$       575,000
Retained earnings	$    1,562,000
Total stockholder's equity		$      2,137,000
Total liabilities and stockholder's equity		$      2,245,000

Answer 4

Common stock and retained earnings both items are reported on the statement of stockholder's equity and balance sheet.

Common stock and retained earnings