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10 April, 12:10

The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local housing rentals. Cash (a) 175,000 (b) 31,000 (d) 15,000 (e) 550 (g) 1,500 (h) 9,500 (i) 3,500 Equipment (c) 65,000 Accounts Receivable (f) 11,000 (g) 1,500 Accounts Payable (c) 65,000 Supplies (b) 31,000 Wade Wilson, Capital (a) 175,000 Fees Income (d) 15,000 (f) 11,000 Telephone Expense (e) 550 Wade Wilson, Drawing (i) 3,500 Salaries Expense (h) 9,500 Prepare a trial balance and an income statement for Residential Relocators. The trial balance is for December 31, 2019, and the income statement is for the month ended December 31, 2019.

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  1. 10 April, 15:42
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    See explanation Section

    Explanation:

    Requirement - A

    Residential Relocators

    Trial Balance

    December 31, 2019

    Account Title Debit Credit

    Cash (Note-1) $146,950

    Accounts Receivable (N-2) 9,500

    Supplies 31,000

    Equipment 65,000

    Accounts Payable 65,000

    Wade Wilson, Capital 175,000

    Wade Wilson, Drawing 3,500

    Fees Income (Note-3) 26,000

    Telephone Expense 550

    Salaries Expense 9,500

    Total $266,000 $266,000

    Requirement - B

    Residential Relocators

    Income Statement

    For the month ended December 31, 2019

    Particulars $ $

    Fees Income $26,000

    Less: Expenses

    Telephone Expense 550

    Salaries Expense 9,500

    Total expenses $ (100,50)

    Net Income $15,950

    Note: 1. Cash:

    Debit amounts = (a) + (d) + (g) = $175,000 + 15,000 + 1,500 = $191,500

    Credit amounts = (b) + (e) + (h) + (i) = $31,000 + 550 + 9,500 + 3,500 = $44,550

    Therefore, cash = $191,500 - 44,550 = $146,950

    Note 2: Accounts Receivable

    Debit Amount = (f) = $11,000

    Credit amount = (g) = $1,500

    Therefore, Accounts Receivable = $11,000 - 1,500 = $9,500

    Note 3: Fees Income

    Debit Amount = (d) + (f) = $15,000 + 11,000 = $26,000
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