In: Accounting
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, $14,280; Accounts Receivable, $29,240; Supplies, $2,720; Land, $34,000; Accounts payable, $12,240. Business transactions during November are summarized as follows:
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.
Income Statement | |||
Bev's Dry Cleaners Income Statement For the Month Ended November 30, 2019 |
|||
---|---|---|---|
1 | Dry cleaning revenue | ||
2 | Expenses | ||
3 | Dry cleaning expense | $ | |
4 | Wages expense | ||
5 | Supplies expense | ||
6 | Rent expense | ||
7 | Truck expense | ||
8 | Utilities expense | ||
9 | Miscellaneous expense | ||
10 | Total expenses | ||
11 | Net loss | $ |
Statement of Owner's Equity | ||||
Bev's Dry Cleaners Statement of Owner's Equity For the Month Ended November 30, 2019 |
||||
---|---|---|---|---|
1 | Beverly Zahn, capital, November 1, 2019 | $ | ||
2 | Additional investment during November | $ | ||
3 | Net income for November | |||
4 | Withdrawals | |||
5 | Increase in owner's equity | |||
6 | Beverly Zahn, capital, November 30, 2019 | $ |
Balance sheet as of November 30:
When entering assets, enter them in order of liquidity.
Balance Sheet | |||||
Bev's Dry Cleaners Balance Sheet November 30, 2019 |
|||||
---|---|---|---|---|---|
1 | Assets | ||||
2 | Cash | $ | $ | ||
3 | Accounts receivable | ||||
4 | Supplies | ||||
5 | Land | ||||
6 | Total assets | $ | $ |
4. Prepare a statement of cash flows for
November:
Use the minus sign to indicate cash outflows, decreases in cash,
and cash payments.
Statement of Cash Flows | |||
Bev's Dry Cleaners Statement of Cash Flows |
|||
---|---|---|---|
1 | Cash flows from operating activities: | ||
2 | $ | ||
3 | |||
4 | Net cash flow from operating activities | $ | |
5 | Cash flows used for investing activities: | ||
6 | |||
7 | Cash flows from financing activities: | ||
8 | $ | ||
9 | |||
10 | Net cash flow from financing activities | ||
11 | Net Increase in cash during November | $ | |
12 | Cash balance, November 1, 2019 | ||
13 | Cash balance, November 30, 2019 | $ |