ACG Chapter 01 solutions

ACG Chapter 01 - CHAPTER 1 THE ROLE OF ACCOUNTING IN BUSINESS PROBLEMS P11 1 PADRE TRAVEL SERVICE Income Statement For the Year Ended Fees earned

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CHAPTER 1 THE ROLE OF ACCOUNTING IN BUSINESS PROBLEMS P1–1 1. PADRE TRAVEL SERVICE Income Statement For the Year Ended June 30, 2010 Fees earned. ...................................................................... $1,579,200 Operating expenses: Wages expense. .......................................................... $790,200 Rent expense. .............................................................. 226,800 Utilities expense. ......................................................... 135,000 Supplies expense. ....................................................... 42,600 Taxes expense. ............................................................ 33,600 Miscellaneous expense. ............................................. 16,000 Total operating expenses. .................................... 1,244,200 Net income. ........................................................................ $ 335,000 2. PADRE TRAVEL SERVICE Retained Earnings Statement For the Year Ended June 30, 2010 Retained earnings, July 1, 2009. ..................................... $210,000 Net income for the year. ................................................... $335,000 Less dividends. ................................................................. 180,000 Increase in retained earnings. ......................................... 155,000 Retained earnings, June 30, 2010. .................................. $365,000 3. PADRE TRAVEL SERVICE Balance Sheet June 30, 2010 Assets Cash. .................................................................................. $318,300 Accounts receivable. ........................................................ 188,100 Supplies. ............................................................................ 20,100 Total assets. ...................................................................... $526,500 Liabilities Accounts payable. ............................................................ $ 71,500
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Stockholders’ Equity Capital stock. ..................................................................... $ 90,000 Retained earnings. ............................................................ 365,000 455,000 Total liabilities and stockholders’ equity. ...................... $526,500
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P1–2 1. Realty businesses, like Stone Realty, are service businesses that aid their clients in buying or selling real estate. 2. a. Wages expense, $32,250 ($71,700 – $14,400 – $12,000 – $8,100 – $4,950) b. Net income, $69,300 ($141,000 – $71,700) c. Net income for September, $69,300 d. Dividends, $36,000 e. Retained earnings, September 30, 2010, $33,300 ($69,300 – $36,000) f. Land, $216,000 g. Total assets, $310,500 ($88,500 + $6,000 + $216,000) h. Capital stock, $270,000
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This note was uploaded on 06/18/2011 for the course ACG 3024 taught by Professor Bugger during the Spring '11 term at FGCU.

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ACG Chapter 01 - CHAPTER 1 THE ROLE OF ACCOUNTING IN BUSINESS PROBLEMS P11 1 PADRE TRAVEL SERVICE Income Statement For the Year Ended Fees earned

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