Obj. 4,5 • PR 1-5A 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: 3. Net income: $63,775 EMPLATE Joel Palk invested additional cash in exchange for common stock with a deposit of $35,000 in the business bank a. 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. Received cash from customers for dry cleaning revenue, $32,125. d. Paid rent for the month, $6,000. C. 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. 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. i. 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 retained earnings as of July 1, 20Y4. 2. State the assets, liabilities, and stockholders' equity as of July 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. 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Obj. 4, 5
• PR 1-5A 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 bu
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:
V 3. Net income:
$63,775
EXCEL TEMPLATE
Joel Palk invested additional cash in exchange for common stock with a deposit of $35,000 in the business bank
a.
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.
Received cash from customers for dry cleaning revenue, $32,125.
C.
d.
Paid rent for the month, $6,000.
Purchased supplies on account, $2,500.
e.
f.
Paid creditors on account, $22,800.
g. Charged customers for dry cleaning revenue on account, $84,750.
Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $29,500.
h.
i.
Paid the following: wages expense, $7,500; truck expense, $2,500; utilities expense, $1,300; miscellaneous
expense, $2,700.
Received cash from customers on account, $88,000.
j.
k. Determined that the cost of supplies on hand was $5,900; therefore, the cost of supplies used during the month
was $3,600.
I.
Paid dividends, $12,000.
Instructions
1. Determine the amount of retained earnings as of July 1, 20Y4.
2. State the assets, liabilities, and stockholders' equity as of July 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. 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.
Transcribed Image Text:Obj. 4, 5 • PR 1-5A 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 bu 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: V 3. Net income: $63,775 EXCEL TEMPLATE Joel Palk invested additional cash in exchange for common stock with a deposit of $35,000 in the business bank a. 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. Received cash from customers for dry cleaning revenue, $32,125. C. d. Paid rent for the month, $6,000. Purchased supplies on account, $2,500. e. f. Paid creditors on account, $22,800. g. Charged customers for dry cleaning revenue on account, $84,750. Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $29,500. h. i. Paid the following: wages expense, $7,500; truck expense, $2,500; utilities expense, $1,300; miscellaneous expense, $2,700. Received cash from customers on account, $88,000. j. k. Determined that the cost of supplies on hand was $5,900; therefore, the cost of supplies used during the month was $3,600. I. Paid dividends, $12,000. Instructions 1. Determine the amount of retained earnings as of July 1, 20Y4. 2. State the assets, liabilities, and stockholders' equity as of July 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. 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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