Transactions; Financial Statements Bev’s Dry Cleaners is owned and operated by B

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, $14,490; Accounts Receivable, $29,670; Supplies, $2,760; Land, $34,500; Accounts payable, $12,420. Business transactions during November are summarized as follows:

Beverly Zahn invested additional cash in the business with a deposit of $27,000 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 $13,300.

Paid rent for the month, $16,220.

Charged customers for dry cleaning revenue on account, $4,860.

Paid creditors on account, $2,270.

Purchased supplies on account, $12,000.

Received cash from cash customers for dry cleaning revenue, $25,940.

Received cash from customers on account, $32,430.

Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $12,970.

Paid the following: wages expense, $7,130; truck expense, $2,590; utilities expense, $2,760; miscellaneous expense, $1,230.

Determined that the cost of supplies on hand was $1,780; therefore, the cost of supplies used during the month was $3,250.

Withdrew $7,500 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.

Next

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 $

Explanation / Answer

Determination of Beverly Zahn's Capital as of November 1 Asset-Liabilities     = Capital Asset Cash 14490 Supplies 2760 Accounts Receivable 29670 Land 34500 Total asset 81420 Less : Accounts Payable 12420 Beverly Zahn's Capital 69000 Income Statement Bev's Dry Cleaners Income Statement For the Month Ended November 30, 2019 1 Dry cleaning revenue 30800 2 Expenses 3     Dry cleaning expense 12970 4     Wages expense 7130 5     Supplies expense 3250 6     Rent expense 16220 7     Truck expense 2590 8     Utilities expense 2760 9     Miscellaneous expense 1230 10 Total expenses 46150 11 Net loss -15350 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 69000 2 Additional investment during November $ 27000 3 Net loss for November -15350 4 Withdrawals -7500 5 Increase in owner's equity 4150 6 Beverly Zahn, capital, November 30, 2019 73150 Balance sheet as of November 30: Balance Sheet Bev's Dry Cleaners Balance Sheet For the Month Ended November 30, 2019 1 Assets 2 Cash $ 34860 $ 3 Accounts Receivable 2100 4 Supplies 1780 5 Land 47800 6 Total assets $ 86540 $ Liabilities & Owner's equity Accounts payable 13390 Beverly Zahn's capital 73150 Total Liabilities & Owner's Equity 86540 Statement of Cash Flows Bev's Dry Cleaners Statement of Cash Flows For the Month Ended November 30, 2019 1 Cash flows from operating activities: 2     Cash receipts from customers 58370 3     Cash payments for expenses and payments to creditors 44200 4     Net cash flow from operating activities 14170 5 Cash flows used for investing activities: 6     Cash payment for purchase of land -13300 7 Cash flows from financing activities: 8     Cash receipt of owner's investment $ 27000 9     Cash withdrawal by owner -7500 10     Net cash flow from financing activities 19500 11 Net Increase in cash during November 20370 12 Cash balance, November 1, 2019 14490 13 Cash balance, November 30, 2019 34860 Note : Question had certain error which has been rectified in the following manner. Purchased supplies for cash( & not on account) is 2270 & not 12000 Paid creditors on account is 12000 & Not 2270 Also balance sheet given did not contain Liabilities and Owner's Equity section which has been inserted Kindly take note of above Thank You

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