We-Sell Realty was organized as a corporation on August 1, 20Y7, by the issuance of common stock of $15,000. We-Sell Realty is owned and operated by Omar Farah, the sole stockholder. The following statements for We-Sell Realty were prepared after its first month of operations: We-Sell Realty Income Statement August 31, 20Y7 Sales commissions $ 140,000 Expenses: Office salaries expense Rent expense Automobile expense Miscellaneous expense $87,000 18,000 7,500 2,200 ..... Supplies expense Total expenses. 1,150 (115,850) $ 25,000 Net income . Omar Farah Statement of Stockholders' Equity For the Year Ended August 31, 20Y6 Retained Earnings Total Balances, August 1, 20Y7... $ $ 0 Net income... 25,000 25,000 Dividends.. (10,000) $ 15,000 (10,000) $ 15,000 Balances, Augr 20Υ7. . Balance Sheet For the Month Ended August 31, 20Y7 Assets $ 8,900 22,350 $31,250 Cash Accounts payable Total assets Liabilities Accounts receivable . $38,600 Supplies..... 4,000 Stockholders' Equity Retained earnings.... Total liabilities and stockholders' equity.. 30,000 $72,600 Identify the errors contained within the presented financial statements for We-Sell Realty. b. Prepare a corrected set of financial statements for We-Sell Realty. a.

We-Sell Realty was organized as a corporation on August 1, 20Y7, by the issuance of common stock of $15,000. We-Sell Realty is owned and operated by Omar Farah, the sole stockholder. The following statements for We-Sell Realty were prepared after its first month of operations: We-Sell Realty Income Statement August 31, 20Y7 Sales commissions $ 140,000 Expenses: Office salaries expense Rent expense Automobile expense Miscellaneous expense $87,000 18,000 7,500 2,200 ..... Supplies expense Total expenses. 1,150 (115,850) $ 25,000 Net income . Omar Farah Statement of Stockholders' Equity For the Year Ended August 31, 20Y6 Retained Earnings Total Balances, August 1, 20Y7... $ $ 0 Net income... 25,000 25,000 Dividends.. (10,000) $ 15,000 (10,000) $ 15,000 Balances, Augr 20Υ7. . Balance Sheet For the Month Ended August 31, 20Y7 Assets $ 8,900 22,350 $31,250 Cash Accounts payable Total assets Liabilities Accounts receivable . $38,600 Supplies..... 4,000 Stockholders' Equity Retained earnings.... Total liabilities and stockholders' equity.. 30,000 $72,600 Identify the errors contained within the presented financial statements for We-Sell Realty. b. Prepare a corrected set of financial statements for We-Sell Realty. a.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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