Would you classify a realty business like ruby river

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Reference no: EM13535349

The financial statements at the end of Ruby River Realty's first month of operations are shown below.

Ruby River Realty

Income Statement

For the Month Ended June 30, 2004

 

 

 

Fees earned . .

 

$23,500

Operating expenses:

 

 

Wages expense .

$ (a)

 

Rent expense . .

4,400

 

Utilities expense

1,350

 

Miscellaneous expense .

825

 

Total operating expenses .

 

11,950

Net income . .

 

$ (b)

 

Ruby River Realty

Retained Earnings Statement

For the Month Ended June 30, 2004

Net income for June . .

$ (c)

 

Less dividends

(d)

 

Retained earnings, June 30, 2004 .

 

$ (e)

 

 

Ruby River Realty

Balance Sheet

June 30, 2004

Assets

 

 

Cash .

 

$14,750

Prepaid expenses .

 

1,000

Land .

 

(f )

Total assets . .

 

$ (g)

Liabilities

 

 

Accounts payable .

 

$ 1,200

Stockholders' Equity

 

 

Capital stock .

$ (h)

 

Retained earnings .

(i)

(j)

Total liabilities and stockholders' equity . .

 

$ (k)

 

Ruby River Realty Statement of Cash Flows

For the Month Ended June 30, 2004

Cash flows from operating activities:

 

 

Cash received from customers

$ (l)

 

Deduct cash payments for expenses and payments to creditors

11,750

 

 

Net cash flow from operating activities

 

$ (m)

Cash flows from investing activities:

 

 

Cash payments for acquisition of land

 

$ 36,000)

Cash flows from financing activities:

 

 

Cash received from issuing capital stock

$45,000

 

Deduct dividends

6000

 

Net cash flow from financing activities

 

(n)

Net cash flow and June 30, 2004 cash balance

 

 

$(0)

Instructions

1. Would you classify a realty business like Ruby River as a manufacturing, merchandising, or service business?

2. By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (o).

Reference no: EM13535349

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