Question

Outlaw Realty, organized August 1, Year 1, is owned and operated by Julie Baxter. How many errors can you find in the following financial statements for Outlaw Realty, prepared after its first month of operations? Assume that the cash balance on August 31, Year 1, is $51,600 and that cash flows from operating activities is reported correctly.


JULIE BAXTER
Retained Earnings Statement
August 31, Year 2
Retained earnings, August 1, Year 1 ....................................... $ 7,800
Less dividends during August................................................ 12,000
$ 5,800
Net income for the month.................................................. 134,500
Retained earnings, August 31, Year 1................................... $ 40,300


Statement of Cash Flows
August 31, Year1


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  • CreatedMarch 11, 2014
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