Neighborhood Realty, Incorporated, has been operating for three years and is owned by three investors. S. Bhojraj owns 60 percent of the total outstanding stock of 9,080 shares and is the managing executive in charge. On December 31, current year, the following financial items for the entire year were determined: commissions earned and collected in cash, $152,300, plus $18,200 uncollected; rental service fees earned and collected, $20,700; salaries expense paid, $62,380; commissions expense paid, $35,190; payroll taxes paid, $1,800; rent paid for January through November, $2,508 (not including December rent yet to be paid); utilities expense paid, $1,900; promotion and advertising paid, $7,580; income taxes paid, $22,600; and miscellaneous expenses paid, $480. There were no other unpaid expenses at December 31. Also during the year, the company paid the owners "out-of-profit" cash dividends amounting to $10,700. Complete the following income statement:
Neighborhood Realty, Incorporated, has been operating for three years and is owned by three investors. S. Bhojraj owns 60 percent of the total outstanding stock of 9,080 shares and is the managing executive in charge. On December 31, current year, the following financial items for the entire year were determined: commissions earned and collected in cash, $152,300, plus $18,200 uncollected; rental service fees earned and collected, $20,700; salaries expense paid, $62,380; commissions expense paid, $35,190; payroll taxes paid, $1,800; rent paid for January through November, $2,508 (not including December rent yet to be paid); utilities expense paid, $1,900; promotion and advertising paid, $7,580; income taxes paid, $22,600; and miscellaneous expenses paid, $480. There were no other unpaid expenses at December 31. Also during the year, the company paid the owners "out-of-profit" cash dividends amounting to $10,700. Complete the following income statement:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:E1-8 (Algo) Analyzing Revenues and Expenses and Completing an Income Statement LO1-1
Neighborhood Realty, Incorporated, has been operating for three years and is owned by three investors. S. Bhojraj owns 60 percent of
the total outstanding stock of 9,080 shares and is the managing executive in charge. On December 31, current year, the following
financial items for the entire year were determined: commissions earned and collected in cash, $152,300, plus $18,200 uncollected;
rental service fees earned and collected, $20,700; salaries expense paid, $62,380; commissions expense paid, $35,190; payroll taxes
paid, $1,800; rent paid for January through November, $2,508 (not including December rent yet to be paid); utilities expense paid,
$1,900; promotion and advertising paid, $7,580; income taxes paid, $22,600; and miscellaneous expenses paid, $480. There were no
other unpaid expenses at December 31. Also during the year, the company paid the owners "out-of-profit" cash dividends amounting
to $10,700. Complete the following income statement:
Revenues:
Expenses:
> Answer is complete but not entirely correct.
NEIGHBORHOOD REALTY, INCORPORATED
Commissions earned
Rental service fees
Total revenues
Income Statement
For the Year Ended December 31, Current Year
Salaries expense
Commission expense
Payroll tax expense
Rent expense
Pretax income
Utilities expense
Promotion and advertising expense
Miscellaneous expenses
Total expenses (excluding income taxes)
Income tax expense
$
170,500✔
20,700✔
62,380✔
35,190✔
1,800✔
2,508 X
1,900✔
7,580 ✔
480✔
$ 191,200
✓
111,838
79,362 x
22,600
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