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Bookeeping process and transactions for DeBauge Realtors, In

Need help with this short case:

Calculate liquidity and profitabiltiy measures and explain various financial statement relationships for a realty firm.

Debauge Realtors, Inc. is a realty firm owned by Jeff and Kristi DeBauge. The Debauge Family owns 100% of the corporation's stock. The following summarized data is taken from the Dec. 31, 2007 financial statements.

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I have to answer all questions A - i. A-F is on the attachement. That is what i need help with


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a. Cost of services would include the commissions paid to sales people and brokers. In the realtor business, commissions paid could include not only the two owners of this company, but sales people from other firms too, assuming the company is part of an MLS arrangement (multiple listing service).

b. Advertising may be disclosed separately because it is usually the second largest expense and one which the owners may wish to carefully control. The layout of an income statement can be customized ...

Solution Summary

Various discussion items about the format of the income statement for DeBauge Realtors, Inc., the tax rate, the effect of dividends, following by a paragraph about the primary benefit for a realty firm in using the corporate form.