anny\'s dry cleaners is owned and operated by Anny Brum. A building and equipmen

Question

anny's dry cleaners is owned and operated by Anny Brum. A building and equipment are currently being rented, pending expansion to new facilities. the actual work of dry cleaning is done by another company at wholesale rate. the assets and the liabilities of the business on june 1, 2012 are as follows: cash, $25,000; Accounts Receivable, $30,000; Supplies, $5,000; Land $50,000; Accounts Payable, $18,000. Business transaction during June are summarized as follow:

a. Anny Brum invested additional cash in the business with a deposit of $15,000 in the business bank account.
b. Purchased land for use as a parking lot, paying cash of $20,000
C. Paid rent for the month, $3,000
D. charged customers for dry cleaning revenue on account, $22,000
E. Paid creditors on account, $13,000
F. Purchased supplies on account, $1,000
G. Received cash from cash customers for dry cleaning revenue, $28,000
H. Received cash from customers on account, $27,000
I. Received monthly invoice for dry cleaning expense for June( to be paid on July 10), $21,500
J. Paid the following: wages expense, $14,000 ; truck expense, $2,100; utilities expense, $1,800; miscellaneous expense, $1,300
K. determined that the cost of supplies on hand was $3,400; therefore, the cost of supplies used during the month was $2,600
L. withdrew $1,000 for personal use.

Instructions
1. determine the amount of Anny Brum's capital as of June1

2. state the assets, liabilities, and owner's equity as of june1 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. prepare an income statement for june, a statement of owner's equity for June, and a balance sheet as of June 30.

4. Prepare a statement of cash flows for June

Explanation / Answer

(1) Capital on June 1 = 25000+30000+5000+50000-18000 = 92000 answer (2) Cash 25000 +Capital 15000 -land 20000 -rent 3000 -creditors 13000 +cash customers 28000 +cash customers 27000 -expenses 19200 -cash drawings 1000 Total 77200 Accounts Receivable 30000 +customers 22000 -cash 27000 Total 25000 Supplies 5000 +creditors 1000 -used during the year 2600 Total 3400 Land 50000 +cash 20000 Total 70000 Accounts Payable 18000 -cash 13000 +supplies 1000 +monthly invoice 2150 Total 8150 Capital 92000 + cash 15000 -drawings 1000 Total 106000 (3) Income statement Rent paid - 3000 Revenue - 28000 Revenue - 22000 Supplies - 1000 Dre clenaing exp = 21500 Other exp - 19200 Net income = 5300

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