Question

The following T accounts show transactions that were recorded by Residential Relocators, a firm that specializes in local housing rentals. Cash (a) 175,000 (b) 31,000 (d) 15,000 (e) 550 (g) 1,500 (h) 9,500 (i) 3,500 Equipment (c) 65,000 Accounts Receivable (f) 11,000 (g) 1,500 Accounts Payable (c) 65,000 Supplies (b) 31,000 Wade Wilson, Capital (a) 175,000 Fees Income (d) 15,000 (f) 11,000 Telephone Expense (e) 550 Wade Wilson, Drawing (i) 3,500 Salaries Expense (h) 9,500 Prepare a trial balance and an income statement for Residential Relocators. The trial balance is for December 31, 2019, and the income statement is for the month ended December 31, 2019.

Answer 1

Answer:

See explanation Section

Explanation:

Requirement - A

                      Residential Relocators

                            Trial Balance

                         December 31, 2019

Account Title                               Debit                  Credit

Cash (Note-1)                           $146,950

Accounts Receivable (N-2)          9,500

Supplies                                      31,000

Equipment                                  65,000

Accounts Payable                                                  65,000

Wade Wilson, Capital                                           175,000

Wade Wilson, Drawing                 3,500

Fees Income (Note-3)                                            26,000

Telephone Expense                       550

Salaries Expense                         9,500                                

Total                                        $266,000            $266,000

Requirement - B

                            Residential Relocators

                               Income Statement

           For the month ended December 31, 2019

Particulars                                $                       $

Fees Income                                              $26,000

Less: Expenses

Telephone Expense              550

Salaries Expense                9,500        

Total expenses                                           $(100,50)

Net Income                                                 $15,950

Note: 1. Cash:

Debit amounts = (a) + (d) + (g) = $175,000 + 15,000 + 1,500 = $191,500

Credit amounts = (b) + (e) + (h) + (i) = $31,000 + 550 + 9,500 + 3,500 = $44,550

Therefore, cash = $191,500 - 44,550 = $146,950

Note 2: Accounts Receivable

Debit Amount = (f) = $11,000

Credit amount = (g) = $1,500

Therefore, Accounts Receivable = $11,000 - 1,500 = $9,500

Note 3: Fees Income

Debit Amount = (d) + (f) = $15,000 + 11,000 = $26,000