Question

2.- Below is the post-closing trial balance for Acme Uniforms Laundry, a sole proprietorship laundry specializing in uniforms. These are beginning balances for the year: Acme Uniforms Laundry Post-Closing Trial Balance December 31, 2012 | + + + + Cash- Accounts Receivable - Equipment + + Accumulated Depreciation Accounts Payable + Long-Term Bonds Payable Joe Bloe, Capital - + I f I f † † † † † + Dr. Cr. 10,0001 24,000 1 → 46,000 20,000 22,000 20,000 - 18.0001 80,000 80,000 † † † † † On the next page you will find the adjusted trial balance for the year ending December 31, 2013 Please prepare an income statement, a statement of owners equity, a classified balance sheet, and a statement of cash flows, all in good form, including headings, on the pages provided. I Acme Uniforms Laundry Adjusted Trial Balance December 31, 20131 - - + Cr. + - - + Cash + + Accounts Receivable Supplies Inventory + + - Dr. + + 1,9501 19,000 39,000 +

Answer 1

Requirement 1: Prepare the income statement as follows

AU Laundry
Income Statement
For the Year Ended December 31, 2013
Particulars	Amount	Amount
Sales Revenues		$64,550
Deduct: Operating Expenses
Laundry Expenses	$26,000
Selling and Administration Expenses	$6,000
Depreciation Expense	$2,000
Interest Expense	$2,000
Total Operating Expenses		$36,000
Net Income		$28,550

Requirement 2: Prepare the statement of owners' equity as follows

AU Laundry
Statement of Owners' Equity
For the Year Ended December 31, 2013
Particulars	Amount	Amount
Capital - Beginning Balance		$18,000
Add: Net income	$28,550
Deduct: Withdrawals	($2,000)
Net increase during the period		$26,550
Capital - Ending Balance		$44,550

Requirement 3: Prepare the balance sheet as follows

AU Laundry
Balance Sheet
December 31, 2013
Assets	Amount	Amount
Current Assets:
Cash	$1,950
Accounts Receivable	$19,000
Supplies Inventory	$39,000
Prepaid Expenses	$600
Total Current Assets		$60,550
Property, Plant and Equipment
Equipment	$46,000
Less: Accumulated Depreciation	($22,000)	$24,000
Total Assets		$84,550
Liabilities and Owners' Equity
Current Liabilities:
Accounts Payable	$14,000
Customers Deposits (Unearned)	$6,000
Total Current Liabilities		$20,000
Long-term Bonds Payable		$20,000
Total Liabilities		$40,000
Owners' Equity
Capital		$44,550
Total Liabilities and Owners' Equity		$84,550

Requirement 4: Prepare the statement of cash flows as follows

AU Laundry
Cash Flow Statement
For the Year Ended December 31, 2013
Cash flows from operating activities:	Amount	Amount
Net income		$28,550
Adjustments to reconcile net income to net cash from operations
Depreciation expense	$2,000
Add: Decrease in Accounts Receivable ($24,000 − $19,000)	$5,000
Add: Increase Customers Deposits	$6,000
Deduct: Increase in Supplies Inventory	($39,000)
Deduct: Increase in Prepaid Expenses	($600)
Deduct: Decrease in Accounts Payable ($22,000 − $14,000)	($8,000)
Total adjustments		($34,600)
Net cash lost in operating activates:		($6,050)
Cash flows from investing activities:		$0
Cash flows from financing activities:
Withdrawals		($2,000)
Net change in cash		($8,050)
Add: Beginning balance of cash		$10,000
Cash at the end of year		$1,950