Exercise 7.18 (pages 207-208) : The adjusted trial balance of Murphy%u2019s Taxi
ID: 2375076 • Letter: E
Question
Exercise 7.18 (pages 207-208): The adjusted trial balance of Murphy%u2019s Taxi Service, Inc., follows. Determine the net income or loss for the month of May and the balance in the Retained Earnings account that would appear on the balance sheet.
Murphy's Taxi Service, Inc.
Adjusted Trial Balance
May 31, 2010
Debits
Credits
Cash
$ 1,920
Prepaid Insurance
$ 690
Automobiles
$29,500
A/D %u2013 Automobiles
$12,800
Capital Stock
$15,000
Retained Earnings
$ 3,720
Passenger fee revenue
$ 4,250
Salary expense
$ 2,400
Fuel expense
$ 485
Depreciation expense
$ 615
Repairs and maintenance expense
$ 160
Totals
$35,770
$35,770
Murphy's Taxi Service, Inc.
Adjusted Trial Balance
May 31, 2010
Debits
Credits
Cash
$ 1,920
Prepaid Insurance
$ 690
Automobiles
$29,500
A/D %u2013 Automobiles
$12,800
Capital Stock
$15,000
Retained Earnings
$ 3,720
Passenger fee revenue
$ 4,250
Salary expense
$ 2,400
Fuel expense
$ 485
Depreciation expense
$ 615
Repairs and maintenance expense
$ 160
Totals
$35,770
$35,770
Explanation / Answer
netincome = 4250 - 2400 - 485 - 615 - 160 = 590
Ending retained earnings = 3720 + 590 = 4310
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