Transactions; financial statementsD'Lite Dry Cleaners is owned and operated by Joel Palk. A building andequipment are currently being rented, pending expansion to newfacilities. The actual work of dry cleaning is done by another company atwholesale rates. The assets, liabilities, and common stock of thebusiness on July 1, 20Y4, are as follows: Cash, $45,000; AccountsReceivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable,$40,000; Common Stock, $60,000. Business transactions during July aresummarized as follows: a. Joel Palk invested additional cash in exchange for common stockwith a deposit of $35,000 in the business bank account.b. Paid $50,000 for the purchase of land adjacent to land currentlyowned by D'Lite Dry Cleaners as a future building site.c. Received cash from customers for dry cleaning revenue, $32,125.d. Paid rent for the month, $6,000.e. Purchased supplies on account, $2,500.f. Paid creditors on account, $22,800.g. Charged customers for dry cleaning revenue on account,$84,750.h. Received monthly invoice for dry cleaning expense for July (tobe paid on August 10), $29,500.i. Paid the following: wages expense, $7,500; truck expense, $2,500;utilities expense, $1,300; miscellaneous expense, $2,700.j. Received cash from customers on account, $88,000.k. Determined that the cost of supplies on hand was $5,900;therefore, the cost of supplies used during the month was $3,600.1. Paid dividends, $12,000. Instructions1. Determine the amount of retained earnings as of July 1, 20Y4.2. State the assets, liabilities, and stockholders' equity as of July 1 inequation form similar to that shown in this chapter. In tabularform below the equation, indicate increases and decreasesresulting from each transaction and the new balances after eachtransaction.3. Prepare an income statement for July, a statement ofstockholders' equity for July, and a balance sheet as of July 31.4. (Optional) Prepare a statement of cash flows for July.
Transactions; financial statements
D'Lite Dry Cleaners is owned and operated by Joel Palk. 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 rates. The assets, liabilities, and common stock of the
business on July 1, 20Y4, are as follows: Cash, $45,000; Accounts
Receivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable,
$40,000; Common Stock, $60,000. Business transactions during July are
summarized as follows:
a. Joel Palk invested additional cash in exchange for common stock
with a deposit of $35,000 in the business bank account.
b. Paid $50,000 for the purchase of land adjacent to land currently
owned by D'Lite Dry Cleaners as a future building site.
c. Received cash from customers for dry cleaning revenue, $32,125.
d. Paid rent for the month, $6,000.
e. Purchased supplies on account, $2,500.
f. Paid creditors on account, $22,800.
g. Charged customers for dry cleaning revenue on account,
$84,750.
h. Received monthly invoice for dry cleaning expense for July (to
be paid on August 10), $29,500.
i. Paid the following: wages expense, $7,500; truck expense, $2,500;
utilities expense, $1,300; miscellaneous expense, $2,700.
j. Received cash from customers on account, $88,000.
k. Determined that the cost of supplies on hand was $5,900;
therefore, the cost of supplies used during the month was $3,600.
1. Paid dividends, $12,000.
Instructions
1. Determine the amount of
2. State the assets, liabilities, and
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 July, a statement of
stockholders' equity for July, and a balance sheet as of July 31.
4. (Optional) Prepare a statement of cash flows for July.
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