Financial statements
We-Sell Realty, organized August 1, 2014, is owned and operated by Omar Farah. How many errors can you find in the following statements for We-Sell Realty, prepared after its first month of operations?
| We-Sell Realty Income Statement August 31, 2014 | ||
| Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | ||
| Expenses: | $140,000 | |
| Office salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $87,000 | |
| Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 18,000 | |
| Automobile expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,500 | |
| Miscellaneous expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,200 | |
| Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,150 | |
| Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 115,850 | |
| Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 25,000 | |
| Omar Farah Retained Earnings Statement August 31, 2013 | |
| Retained earnings, August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $0 |
| Less dividends during August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? | 10,000 |
| $(10,000) | |
| Additional issuance of capital stock on August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . ? ? | 15,000 |
| $5,000 | |
| Net income for August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 25,000 |
| Retained earnings, August 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $30,000 |
| Balance Sheet For the Month Ended August 31, 2014 | |||
| Assets | Liabilities | ||
| Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 8,900 | Accounts receivable . . . . . . . . . . . . . . . . . . . . . | $38,600 |
| Accounts payable | 22,350 | Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000 |
| Stockholders’ Equity | |||
| Retained earnings . . . . . . . . . . . . . . . . . . . . . . | 30,000 | ||
| Total assets . . . . . . . . . . . . . . . . . . . . . . . | $31,250 | Total liabilities and stockholders’ equity . . | $72,600 |
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