Transactions; Financial Statements Bev’s Dry Cleaners is owned and operated by B
ID: 2551116 • Letter: T
Question
Transactions; Financial Statements
Bev’s Dry Cleaners is owned and operated by Beverly Zahn. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company for a fee. The assets and the liabilities of the business on November 1, 2019, are as follows: Cash, $14,910; Accounts Receivable, $30,530; Supplies, $2,840; Land, $35,500; Accounts payable, $12,780. Business transactions during November are summarized as follows:
Beverly Zahn invested additional cash in the business with a deposit of $29,000 in the business bank account.
Purchased land adjacent to land currently owned by Bev’s Dry Cleaners to use in the future as a parking lot, paying cash of $14,600.
Paid rent for the month, $17,750.
Charged customers for dry cleaning revenue on account, $5,330.
Paid creditors on account, $2,490.
Purchased supplies on account, $13,140.
Received cash from cash customers for dry cleaning revenue, $28,400.
Received cash from customers on account, $35,500.
Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $14,200.
Paid the following: wages expense, $7,810; truck expense, $2,840; utilities expense, $3,020; miscellaneous expense, $1,350.
Determined that the cost of supplies on hand was $1,950; therefore, the cost of supplies used during the month was $3,380.
Withdrew $8,200 cash for personal use.
Required:
1. Determine the amount of Beverly Zahn’s capital as of November 1.
$
2. Use the attached spreadsheet to complete part 2. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.
Enter the assets, liabilities, and owner's equity as of November 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction.
3. Using the balances from the spreadsheet, prepare an income statement for November, a statement of owner's equity for November, and a balance sheet as of November 30. Use a minus sign to indicate a net loss if applicable.
Balance sheet as of November 30:
When entering assets, enter them in order of liquidity.
4. Prepare a statement of cash flows for November:
Use the minus sign to indicate cash outflows, decreases in cash, and cash payments.
1 2 3 $ 4 5 6 7 8 9 10 11 $
Explanation / Answer
Asset = Liability + owners Equity
83,780 = $12,780+Owners Equity
So owners Equity = $71000
Note
Asset =Cash + accounts Receivables land +supplies.
Asset = $14,910+$30530+$2,840+$35500= $83,780
Liability= Accounts Payable = $12,780
I am preparing All in common format because iam not know which format your facuklty want. Use this information to prepare your Final answer.
Income Statement
$
Sales Revenue
33,730
Less
Cost of Sales
(43,250)
=
Gross loss
9,520
Less
Operating Expenses
17,750
=
Net Loss
-27,270
Statement of Equity
$
Owners Capital on December 1 November 2017
71,000
Add
Additional capital
29,000
Less
Net Loss
27,270
Less
withdrawals
8,200
=
Capital on November 30st 2017
64,530
Statement of financial position
$
Current Asset
Cash
49,750
Prepaid Insurance
Prepaid Rent
Inventory
1,950
Account Receivable
35,860
Total Current Asset
87,560
Non Current Asset
Land
50,100
Total Non Current asset
50,100
Total Asset
137,660
Liability
Current Liability
Accounts Payable
37,630
Income received in advance
35,500
Total current liability
73,130
Long Teerm liability
Unearned Training Fee
Total long Term liability
Total liability
Equity
64,530
Total liability and Equity
137,660
Income Statement
$
Sales Revenue
33,730
Less
Cost of Sales
(43,250)
=
Gross loss
9,520
Less
Operating Expenses
17,750
=
Net Loss
-27,270
Statement of Equity
$
Owners Capital on December 1 November 2017
71,000
Add
Additional capital
29,000
Less
Net Loss
27,270
Less
withdrawals
8,200
=
Capital on November 30st 2017
64,530
Statement of financial position
$
Current Asset
Cash
49,750
Prepaid Insurance
Prepaid Rent
Inventory
1,950
Account Receivable
35,860
Total Current Asset
87,560
Non Current Asset
Land
50,100
Total Non Current asset
50,100
Total Asset
137,660
Liability
Current Liability
Accounts Payable
37,630
Income received in advance
35,500
Total current liability
73,130
Long Teerm liability
Unearned Training Fee
Total long Term liability
Total liability
Equity
64,530
Total liability and Equity
137,660
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