RHIM 3321 Income NAME ACME Hotel has the following trial balance (after adjustme

Question

RHIM 3321 Income NAME ACME Hotel has the following trial balance (after adjustments) for the period ending 12/31/2014 Trial Balance After Adjustments For The Period Ending 12/31/2014 ACCOUNTS Cash Equipment Furniture Accounts Receivable Notes Receivable Inventory Insurance Expense Utilities Expense Wages Expense Depreciation Expense DEBIT CREDIT $30,000 $85,000 $67,000 $21.300 $40,000 $28,400 $12,000 $14,680 35,000 $14,000 $24,000 $86,600 $18,000 $6,000 $4,800 $6,620 Rent Expense Cost of sales Prepaid Insurance Accrued Interest Receivable Interest Expense Miscellaneous Expense Capital Sales Accounts Payable Notes Payable Accumulated Depreciation Interest Income Accrued Wages Payable Accrued Interest Payable Retained Earnings (1/1/2014) $160,000 $234,600 $18,000 $25,000 $21,400 $9,600 $5,000 $4,800 $15,000 5493,400 TOTAL BALANCE $493,400 USING THE ABOVE INFORMATION, PREPARE: a) Income Statement b) Statement of Retained Earnings (The Hotel decided to pay out $15,000 in dividends).

Explanation / Answer

Acme Co. Income Statement Sales $234,600.00 Less: Cost of Sales $86,600.00 Gross Profit $148,000.00 Less: Operating Expenses Insurance Expense $12,000.00 Utilities Expense $14,680.00 Rent Expense $24,000.00 Wages Expense $35,000.00 Depreciation Expense $14,000.00 Miscellneous Expenses $6,620.00 Total Operating Expenses $106,300.00 Operating Income $41,700.00 Interest Income $9,600.00 Less: Interest Expense $4,800.00 Net Income $46,500.00 Statement of Retained Earnings Beginning Retained Earnings $15,000.00 Add: Net Income $46,500.00 Less: Dividend $15,000.00 Ending Retained Earnings $46,500.00

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