Reference no: EM132884793
Question - 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, 2018, are as follows: Cash, $15,330; Accounts Receivable, $41,390; Supplies, $2,920; Land, $36,500; Accounts payable, $13,140; Common Stock, $10,000. Business transactions during July are summarized as follows:
1. Joel Palk invested additional cash in exchange for common stock with a deposit of $28,000 in the business bank account.
2. Paid $13,800 for the purchase of land adjacent to land currently owned by D'Lite Dry Cleaners as a future building site.
3. Received cash from customers for dry cleaning revenue, $16,790.
4. Paid rent for the month, $5,040.
5. Purchased supplies on account, $2,350.
6. Paid creditors on account, $12,420.
7. Charged customers for dry cleaning revenue on account, $33,580.
8. Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $13,430.
9. Paid the following: wages expense, $7,390; truck expense, $2,690; utilities expense, $2,850; miscellaneous expense, $1,280.
10. Received cash from customers on account, $26,860.
11. Determined that the cost of supplies on hand was $1,850; therefore, the cost of supplies used during the month was $3,420.
12. Paid dividends, $7,700.
Required -
1. Determine the amount of retained earnings as of July 1, 2018.
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 Cengage NOW on this problem.
The assets, liabilities, and stockholders' equity as of July 1 are presented 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. Using the balances from the spreadsheet, prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31.