We-Sell Realty was organized as a corporation on August 1, 20Y7, by the issuance of common stock of $15,000. We-Sell Realty is owned and operated by Omar Farah, the sole stockholder. The following statements for We-Sell Realty were prepared after its first month of operations:

a. Identify the errors contained within the presented financial statements for We-Sell Realty.

b. Prepare a corrected set of financial statements for We-Sell Realty.

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We-Sell Realty Income Statement August 31, 20Y7 $ 140,000 Sales commissions Expenses: Office salaries expense $87,000 18,000 7,500 .... . Rent expense Automobile expense Miscellaneous expense . Supplies expense Total expenses 2,200 1,150 (115,850) $ 25,000 Net income.. Omar Farah Statement of Stockholders' Equity For the Year Ended August 31, 20Ý6 Retained Earnings Total Balances, August 1, 20Y7.. Net income.... 25,000 25,000 .... Dividends.. (10,000) $ 15,000 (10,000) $ 15,000 ..... Balances, August 31, 20Y7... Balance Sheet For the Month Ended August 31, 20Y7 Assets $ 8,900 Cash ...... Accounts payable Total assets . 22,350 $31,250 Liabilities Accounts receivable... $38,600 Supplies..... 4,000 Stockholders' Equity Retained earnings..... Total liabilities and stockholders' equity.. 30,000 $72,600