Question

The balances of Adventure Travel Service’s accounting equation items for the year ended April 30, 2019, are listed below. Jerome Foley, the owner, invested an additional $60,000 in the business during the year and withdrew cash of $40,000 for personal use. Jerome Foley, capital as of May 1, 2018, was $1,020,000. Accounts Fees earned $2,180,000 Office expense 400,000 Miscellaneous expense 25,000 Wages expense 1,300,000 Accounts payable 105,000 Accounts receivable 485,000 Cash 197,000 Land 900,000 Supplies 18,000 Prepare a balance sheet as of April 30, 2019. Refer to the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. When entering assets, enter them in order of liquidity.

Answer 1

Income statement

Revenues
Accounts Fees earned	2,180,000
Total revenues (i)
Expenses
Office expense	400,000
Miscellaneous expense	25,000
Wages expense	1,300,000
Total expenses (ii)	1,725,000
Net income (i) - (ii)	$455,000

Balance sheet

As at April 30, 2019

Assets	Amount	Liabilities and owner's equity
Current assets		Current liabilities
Cash	197,000	Accounts payable		105,000
Accounts receivable	485,000	Total current liabilities		105,000
Supplies	18,000	Owner's capital
Total current assets	700,000	Jerome Foley, capital beginning	1,020,000
Non current assets		Net income	455,000
Land	900,000	Additional capital	60,000
Total Non current assets	900,000	Less: Drawings	- 40,000
		Jerome Foley, capital ending		1,495,000
Total assets	1,600,000	Total Liabilities and owner's equity		1,600,000

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