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Obj. 4, 5 3. Net income: Bevs Dry Cleaners is owned and operated by Beverly Zahn. A building and equipment are $40,150 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 November 1, 2018, are as follows: Cash, $39,000; Accounts Receivable, $80,000; Supplies, $11,000; Land, $50,000; Accounts Payable, $31,500; Common Stock, $50,000. Business PR 1-5B Transactions; financial statements transactions during November are summarized as follows: A. EXCEL TEMPLATE Beverly Zahn invested additional cash in exchange for common stock with a deposit of $21,000 in the business bank account. B. Purchased land adjacent to land currently owned by Bevs Dry Cleaners to use in the future as a parking lot, paying cash of $35,000. C. Paid rent for the month, $4,000. D. Charged customers for dry cleaning revenue on account, $72,000. E. Paid creditors on account, $20,000 F. Purchased supplies on account, $8,000 G. Received cash from customers for dry cleaning revenue, $38,000. H. Received cash from customers on account, $77,000 I. Received monthly invoice for dry cleaning expense for November (to be paid on December 10), $29,450. J. Paid the following: wages expense, $24,000; truck expense, $2,100, utilities expense, $1,800; miscellaneous expense, $1,300. K. Determined that the cost of supplies on hand was $11,800, therefore, the cost of supplies used during the month was $7,200. L Paid dividends, $5,000. Instructions 1. Determine the amount of retained earnings as of November 1. 2. State the assets, liabilities, and stockholders 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. Prepare an income statement for November, a retained earnings statement for November, and a balance sheet as of November 30. 4. (Optional) Prepare a statement of cash flows for November.
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1. Assets Liabilities+Owners Equity Accounts Accounts CashReceivable + SuppliesLandPayable + Beverly Zahn, Capital $39,000 $80,000 + $11,000$50,000$31,500 Beverly Zahn, Capital $180,000$31,500 +Beverly Zahn, Capital $148,500Beverly Zahn, CapitalAssets LiabilitiesOwners Equity Beverly Beverly Cash +Rec.+ Supplies+Land PayableCapital Drawing 11,000 148,500 +21,000 169,500 39,000 (a) +21,000 60,000 35,000 25,000 4,000 21,000 80,000 50,000 31,500 11,000 50,000 +35,000 85,000 80,000 31,500 80,000 11,000 31,500 169,500 80,000 +72,000 152,000 11,000 85,000 31,500 169,500 11,000 85,000 31,500 20,000 11,500 8,000 19,500 169,500 21,000 20,000 11,000 +8,000 19,000 152,000 85,000 169,500 152,000 85,000 169,500 (g) +38,000 39,000 (h)+77,000 116,000 19,000 152,000 77,000 75,000 85,000 19,500 169,500 19,500 + 29,450 48,950 19,000 85,000 169,500 75,000 19,000 85,000 169,500 116,000 - 29,200 86,800 75,000 19,000 7,200 11,800 85,000 48,950 169,500 75,000 85,000 48,950 169,500 86,800 5,000 81,800 5,000 5,000 75,000 11,800 85,000 48,950 169,500Owners Equity (Continued) Dry Cleaning Dry Cleaning Exp. Wages Exp. Supplies Exp. Rent Exp Truck Exp. Utilities Exp. Misc. Exp. + Revenue Bal Bal. Bal. 4,000 4,000 Bal (d) + 72,000 Bal. 72,000 4,000 Bal 72,000 4,000 72,000 (g) + 38,000 Bal. 110,000 Bal. 4,000 4,000 Bal 110,000 4,000 29,450 29,450 Bal. 110,000 -4,000 24,000 24,000 2,100 2,100 1,800 1,800 1,300 110,000 29,450 4,000 1,300 7,200 7,200 Ba 110,000 29,450 24,000 4,000 2,100 1,800 1,300 4.000 - 2,100 2101,800 801,300 110,000 29,450 - 7,200 - 57O024,000BEVS DRY CLEANERS Income Statement 3. For the Month Ended November 30 $110,000 Dry cleaning revenue Expenses: Dry cleaning expense Wages expense Supplies expense Rent expense Truck expense Utilities expense Miscellaneous expense $29,450 24,000 7,200 4,000 2,100 1,800 1,300 69,850 $ 40,150 Total expenses Net income BEVS DRY CLEANERS Statement of Owners Equity For the Month Ended November 30 $148,500 Beverly Zahn, capital, November 1, 2016 Additional investment during November Net income for November $21,000 40,150 $61,150 5,000 Less withdrawals Increase in owners equity Beverly Zahn, capital, November 30, 2016 56,150 $204,650 BEVS DRY CLEANERS Balance Sheet November 30 Assets Liabilities $ 81,800Accounts payable $ 48,950 Cash Accounts receivable Supplies Land 75,000 11,800 85,000Beverly Zahn, capital Owners Equity 204,650 Total liabilities and Total assets $253,600owners equity $253,6004. (Optional) BEVS DRY CLEANERS Statement of Cash Flows For the Month Ended Novemer 30, 2018 Cash flows from operating activities: Cash received from customers* $115,000 Deduct cash payments for expense:s and payments to creditors* Net cash flows from operating activities 53,200 $ 61,800 Cash flows used for investing activities: Purchase of land 35,000 Cash flows from financing activities: Cash received as owners investment Deduct cash withdrawal by owner Net cash flows from financing activities $ 21,000 5,000 Net increase in cash during November Cash balance, November 1, 2018 Cash balance, November 30, 2018 16,000 $ 42,800 39,000 $ 81,800 * $38,000 $77,000; these amounts are taken from the cash column of the spreadsheet in Part 2. ** $4,000 $20,000+ $29,200; these amounts are taken from the cash column of the spreadsheet in Part 2.

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