The amounts of the assets and liabilities of Nordic TravelAgency at December 31, 2016, the end of the year, and its revenueand expenses for the year follow. The retained earnings were$640,000 on January 1, 2016, the beginning of the year. During theyear, dividends of $43,000 were paid.
| Accounts payable | $ 65,500 |
| Accounts receivable | 264,000 |
| Cash | 180,500 |
| Common stock | 70,000 |
| Fees earned | 849,200 |
| Land | 541,000 |
| Miscellaneous expense | 6,900 |
| Rent expense | 32,000 |
| Supplies | 5,200 |
| Supplies expense | 4,100 |
| Utilities expense | 28,000 |
| Wages expense | 520,000 |
| Required: |
| 1. | Prepare an income statement for the year ended December 31,2016. Refer to the lists of Accounts, Labels, and AmountDescriptions provided for the exact wording of the answer choicesfor text entries. Be sure to complete the statement heading. If anet loss is incurred, enter that amount as a negative number usinga minus sign. A colon (:) will automatically appear if it isrequired. |
| 2. | Prepare a retained earnings statement for the year endedDecember 31, 2016. Refer to the information given and the lists ofAccounts, Labels, and Amount Descriptions provided for the exactwording of the answer choices for text entries. Be sure to completethe statement heading. Enter all amounts as positive numbers. Theword “Less” or “Add” is not needed in the Retained EarningsStatement. |
| 3. | Prepare a balance sheet as of December 31, 2016. Refer to thelists of Accounts, Labels, and Amount Descriptions provided for theexact wording of the answer choices for text entries. Be sure tocomplete the statement heading. |
| 4. | What item appears on both the retained earnings statement andthe balance sheet? |
