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15 February, 07:43

October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $76,470 cash. On October 31, the company's records show the following items and amounts. Cash $ 2,000 Cash dividends $ 3,360Accounts receivable 17,000 Consulting fees earned 19,000Office supplies 4,250 Rent expense 3,420Land 36,000 Salaries expense 7,600Office equipment 28,000 Telephone expense 660Accounts payable 7,500 Miscellaneous expenses 680Common stock 76,470 Prepare a balance sheet. Retained earnings are 5060.

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  1. 15 February, 11:43
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    Answer and Explanation:

    The preparation of the balance sheet is presented below:

    Keisha King

    Balance sheet

    Assets

    Current Assets

    Cash $2,000

    Accounts receivable $17,000

    Office supplies $4,250

    Total current assets $23,250

    Land $36,000

    Office equipment $28,000

    Total fixed assets $64,000

    Total assets $87,250

    Liabilities

    Current liabilities

    Accounts payable $7,500

    Total current liabilities $7,500

    Total liabilities $7,500

    Equity

    Common stock $76,470

    Retained earning $3,280 (Working note)

    Total equity $79,750

    Total liabilities and owners equity $87,250

    Working note:

    As we know that

    Retained earning = Sales - rent expense - salary expense - telephone expense - miscellaneous expense - dividend paid

    = $19,000 - $3,420 - $7,600 - $660 - $680 - $3,360

    = $3,280
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