Required information Use the following information for Exercises 16-18 below. Skip to question [The following information applies to the questions displayed below.] Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following selected accounts and amounts for the month of August. Cash $ 25,270 Dividends $ 5,910 Accounts receivable 22,280 Consulting fees earned 26,920 Office supplies 5,150 Rent expense 9,460 Land 43,940 Salaries expense 5,510 Office equipment 19,910 Telephone expense 760 Accounts payable 10,700 Miscellaneous expenses 430 Common stock 101,000 Exercise 2-16 Preparing an income statement LO C3, P3 Use the above information to prepare an August income statement for the business. HELP TODAY Balance Sheet Liabilities: 25,310 Accounts payable 22,320 5,200 Equity: 19,960 Common stock 43,970 Retained earnings Assets: ces Cash $ 10,700 Accounts receivable Office supplies Office equipment Land 101,400 4,660 Total equity $ 116,760 Total Liabilities and Equity 106,060 Total Assets 116,760

Help Today

HELP TODAY

Income Statement for the year ended August 31,

Consulting fees earned             $26,920

Office supplies              $5,150

Rent expense                 9,460

Salaries expense            5,510

Telephone expense         760

Miscellaneous expenses 430     $21,310

Net income                                    $5,610

Dividends                                        (5,910)

Retained earnings                          ($300)

HELP TODAY

Balance Sheet as of August 31

Assets

Current assets:

Cash                        $ 25,270

Accounts receivable 22,280   $47,550

Long-term assets:

Land                          43,940

Office equipment      19,910    $63,850

Total assets                              $111,400

Liabilities and Equity

Current liabilities:

Accounts payable                    $10,700

Equity:

Common stock      101,000

Retained earnings     (300)   $100,700

Total liabilities and equity       $111,400

Explanation:

a) Data and Calculations:

Cash $ 25,270

Dividends $ 5,910

Accounts receivable 22,280

Land 43,940

Office equipment 19,910

Accounts payable 10,700

Common stock 101,000

Consulting fees earned 26,920

Office supplies 5,150

Rent expense 9,460

Salaries expense 5,510

Telephone expense 760

Miscellaneous expenses 430

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.