Question

The balances of Paradise Travel Service’s accounting equation items for the year ended May 31, 2018, are listed below. $10,000 of dividends were paid during the year. Retained earnings as of June 1, 2017, were $300,000.

Accounts
Fees earned	$900,000
Office expense	300,000
Miscellaneous expense	15,000
Wages expense	450,000
Accounts payable	18,000
Accounts receivable	38,000
Cash	52,000
Common stock	100,000
Land	450,000
Supplies	3,000

Prepare a balance sheet as of May 31, 2018. Refer to the lists of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.

Answer 1

Paradise Travel Service
Balance Sheet
May 31, 2018
Assets
Cash	52000
Accounts receivable	38000
Supplies	3000
Land	450000
Total assets		543000
Liabilities
Accounts payable		18000
Stockholders’ Equity
Common stock	100000
Retained earnings	425000
Total stockholders equity		525000
Total liabilities and stockholders equity		543000
Workings:
Fees earned	900000
Expenses:
Office expense	300000
Miscellaneous expense	15000
Wages expense	450000
Total Expenses	765000
Net income	135000
Retained earnings as of June 1, 2017	300000
Add: Net income	135000
Less: Dividends	-10000
Retained earnings as of May 31, 2018	425000