The amounts of theassets andliabilities of Nordic Travel Agency at December 31, 2016, the end of the year, and itsrevenue andexpenses for the year follow. The retained earnings were $600,000 on January 1, 2016, the beginning of the year. During the year, dividends of $42,000 were paid.
| Accounts payable |
$ 69,500 |
| Accounts receivable |
285,000 |
| Cash |
190,500 |
| Common stock |
70,000 |
| Fees earned |
912,500 |
| Land |
544,000 |
| Miscellaneous expense |
6,400 |
| Rent expense |
36,000 |
| Supplies |
5,500 |
| Supplies expense |
4,100 |
| Utilities expense |
28,500 |
| Wages expense |
510,000 |
Required:
1. Prepare an income statement for the year ended December 31, 2016. Refer to the Accounts given in the Instructions and to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred, enter that amount as a negative number using a minus sign. A colon (:) will automatically appear if it is required.
2. Prepare a retained earnings statement for the year ended December 31, 2016. Refer to the Accounts given in the Instructions and to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Enter all amounts as positive numbers. The word "Less" or "Add" is not needed in the Retained Earnings Statement.
3. Prepare a balance sheet as of December 31, 2016. Refer to the Accounts given in the Instructions and to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
4. What item appears on both the retained earnings statement and the balance sheet?