Chapter 2 Basic Accounting Concepts 85Crazy Creek Realty, Inc., organized October 1, 2007, is operated by Jane Eckhart. How many
errors can you find in the following financial statements for Crazy Creek Realty, Inc., prepared
after its first month of operation?Problem 2-6A
Financial statements
Goals3, 5
Crazy Creek Realty, Inc.
Income Statement
October 31, 2007Sales commissions $92,200
Operating expenses:
Office salaries expense $16,300
Rent expense 7,600
Automobile expense 3,500
Dividends 2,000
Miscellaneous expense 1,550
Total operating expenses 30,950
Net income $41,250Jane Eckhart
Retained Earnings Statement
October 31, 2006Net income for the month $41,250
Retained earnings, October 31, 2007 $41,250Balance Sheet
For the Month Ended October 31, 2007Assets
Cash $ 60,850
Notes payable 20,000
Total assets $ 80,850Liabilities
Land $ 40,400Stockholders’ Equity
Capital stock $20,000
Retained earnings 41,250 61,250
Total liabilities and stockholders’ equity $101,650