Americana Realty, organized October 1, 2007, is owned and operated by Marlene Laney. How many errors can you find in the following financial statements for Americana Realty, prepared after its first month of operations? Assume that the cash balance on October 31, 2007, is $11,650 and that cash flows from operating is reported correctly.

Marlene Laney
Retained Earnings Statement
October 31, 2006

Retained earnings, October 1, 2007 .......... $ 4,450
Less dividends during October ........... 3,000
$ 1,450
Net income for the month ............. 33,625
Retained earnings, October 31, 2007 ........ $35,075

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Americana Realty Income Statement October 31, 2007 $77,100 Sales commissions Operating expenses: Office salaries expense Rent expense Miscellaneous expense Automobile expense $43,150 7,800 550 1,975 Total operating expenses 53,475 33,625 Net income Balance Sheet For the Month Ended October 31, 2007 Assets Cash Accounts payable Land Total assets 11,650 3,125 15,000 $29,775 Liabilities Accounts receivable Prepaid expenses 20,300 1,800 Stockholders' Equity Capital stock Retained earnings Total liabilities and stockholders' equity $25,000 35,075 60,075 S82,175 Statement of Cash Flows October 31, 2007 Cash flows from operating activities: Cash received from customers Cash paid for operating expenses Net cash flow from operating activities $56,800 52,150 4,650 Cash flows from financing activities: Cash received from issuance of capital stock Dividends paid to stockholders Net cash flow from financing activities $25,000 (3,000) 22,000 Net cash flow and cash balance as of October 31, 2007 $26,650