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

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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, $16,590; Accounts Receivable, $33,970; Supplies, $3,160; Land, $39,500; Accounts payable, $14,220. Business transactions during November are summarized as follows: Beverly Zahn invested additional cash in the business with a deposit of $33,000 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 $16,500. Paid rent for the month, $20,150. Charged customers for dry cleaning revenue on account, $6,040. Paid creditors on account, $2,820. Purchased supplies on account, $14,910. Received cash from cash customers for dry cleaning revenue, $32,230. Received cash from customers on account, $40,290. Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $16,120. Paid the following: wages expense, $8,860; truck expense, $3,220; utilities expense, $3,420; miscellaneous expense, $1,530. Determined that the cost of supplies on hand was $2,220; therefore, the cost of supplies used during the month was $3,760. Withdrew $9,300 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. . 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
For the Month Ended November 30, 2019 1 Cash flows from operating activities: 2 Cash receipts from customers $ 3 Cash payments for expenses and payments to creditors 4 Net cash flow from operating activities $ 5 Cash flows used for investing activities: 6 Cash payment for purchase of land 7 Cash flows from financing activities: 8 Cash receipt of owner's investment $ 9 Cash withdrawal by owner 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 $ 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, $16,590; Accounts Receivable, $33,970; Supplies, $3,160; Land, $39,500; Accounts payable, $14,220. Business transactions during November are summarized as follows: Beverly Zahn invested additional cash in the business with a deposit of $33,000 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 $16,500. Paid rent for the month, $20,150. Charged customers for dry cleaning revenue on account, $6,040. Paid creditors on account, $2,820. Purchased supplies on account, $14,910. Received cash from cash customers for dry cleaning revenue, $32,230. Received cash from customers on account, $40,290. Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $16,120. Paid the following: wages expense, $8,860; truck expense, $3,220; utilities expense, $3,420; miscellaneous expense, $1,530. Determined that the cost of supplies on hand was $2,220; therefore, the cost of supplies used during the month was $3,760. Withdrew $9,300 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. . 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
For the Month Ended November 30, 2019 1 Cash flows from operating activities: 2 Cash receipts from customers $ 3 Cash payments for expenses and payments to creditors 4 Net cash flow from operating activities $ 5 Cash flows used for investing activities: 6 Cash payment for purchase of land 7 Cash flows from financing activities: 8 Cash receipt of owner's investment $ 9 Cash withdrawal by owner 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 $ 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, $16,590; Accounts Receivable, $33,970; Supplies, $3,160; Land, $39,500; Accounts payable, $14,220. Business transactions during November are summarized as follows: Beverly Zahn invested additional cash in the business with a deposit of $33,000 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 $16,500. Paid rent for the month, $20,150. Charged customers for dry cleaning revenue on account, $6,040. Paid creditors on account, $2,820. Purchased supplies on account, $14,910. Received cash from cash customers for dry cleaning revenue, $32,230. Received cash from customers on account, $40,290. Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $16,120. Paid the following: wages expense, $8,860; truck expense, $3,220; utilities expense, $3,420; miscellaneous expense, $1,530. Determined that the cost of supplies on hand was $2,220; therefore, the cost of supplies used during the month was $3,760. Withdrew $9,300 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. . 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
For the Month Ended November 30, 2019 1 Cash flows from operating activities: 2 Cash receipts from customers $ 3 Cash payments for expenses and payments to creditors 4 Net cash flow from operating activities $ 5 Cash flows used for investing activities: 6 Cash payment for purchase of land 7 Cash flows from financing activities: 8 Cash receipt of owner's investment $ 9 Cash withdrawal by owner 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 $

Explanation / Answer

Supplies used should be $15,850 and not $3760.

Working:

Beginning balance of supplies =$ 3,160

Purchased during the month =$14,910

Total supplies available =$18,070

Less: Supplies on hand =$2,220

Supplies used during the month =$15,850

1. Beverly Zahn's capital on November 1 = $79,000.

The equation is Assets = Liabilities + Capital

16,590+33,970+3,160+39,500 = 14,220 + Capital

Capital = 93,220 - 14,220 = 79,000

2.

Event Assets Liabilities Equity Cash + Accounts + Supplies + Land = Accounts + Unearned + Capital + Retained Receivable Payable Revenue Earings Balances 16590 + 33970 + 3160 + 39500 = 14220 + + 79000 + 1 33000 + + + = + + 33000 + 2 -16500 + + + 16500 = + + + 3 -20150 + + + = + + + -20150 4 + 6040 + + = + + + 6040 5 -2820 + + + = -2820 + + + 6 + + 14910 + = 14910 + + + 7 32230 + -32230 + + = + + + 8 40290 + + + = + 40290 + + 9 + + + = + + + 10 + + + = 16120 + + + -16120 11 * -17030 + + + = + + + -17030 12 -15850 -15850 Totals 65610 + 7780 + 2220 + 56000 = 42430 + 40290 + 112000 + -63110 131610 = 82720 + 48890 Assets = Liabilities + Equity

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