Questions: Balance sheet The account balances of A-One Travel Service for the year ended August 31, 20Y6, follow: Fees earned 1,150,000 Office expense 150,000 Miscellaneous expense 45,000 Wages expense 640,000 Accounts payable 35,000 Accounts receivable 68,000 Cash 184,500 Common stock 75,000 Land 880,000 Supplies 17,500 Cash dividends of 50,000 were paid during the year. Retained earnings as of September 1, 20Y5, were 775,000. Prepare a balance sheet as of August 31, 20Y6. When entering assets, enter them in order of liquidity. A-One Travel Service Balance Sheet August 31, 20Y6 Line Item Description Amount Amount Assets

To prepare a balance sheet for A-One Travel Service as of August 31, 20Y6, we need to organize the given account balances into assets, liabilities, and equity. The balance sheet will reflect the financial position of the company at the end of the fiscal year.

• Current Assets:

  • Cash: $184,500
  • Accounts Receivable: $68,000
  • Supplies: $17,500

• Non-Current Assets:

  • Land: $880,000

Total Assets: $1,150,000

• Accounts Payable: $35,000

Total Liabilities: $35,000

• Common Stock: $75,000
• Retained Earnings:

To calculate the retained earnings as of August 31, 20Y6, we need to adjust the beginning retained earnings for the net income of the year and any dividends paid.

1. Calculate Net Income:

   • Fees Earned: $1,150,000
   • Less: Office Expense: $150,000
   • Less: Miscellaneous Expense: $45,000
   • Less: Wages Expense: $640,000

   Net Income: $1,150,000 - $150,000 - $45,000 - $640,000 = $315,000

2. Calculate Ending Retained Earnings:

   • Beginning Retained Earnings: $775,000
   • Add: Net Income: $315,000
   • Less: Dividends Paid: $50,000

   Ending Retained Earnings: $775,000 + $315,000 - $50,000 = $1,040,000

Total Equity: $75,000 (Common Stock) + $1,040,000 (Retained Earnings) = $1,115,000

• Total Assets: $1,150,000
• Total Liabilities and Equity: $1,150,000

The balance sheet is balanced, with total assets equaling the sum of total liabilities and equity.