Question

From Journal Entry to Financial Statement Bev's Dry Cleaners is owned and operated by Beverly Zahn. A building and equipment are currently being rented. The actual work of dry cleaning is done by another company and they charge a fee to Bev. The beginning balances of the business's general ledger at January 1, 2019 are as follows: Cash debit balance $39,000 Accounts Receivable debit balance $80,000 Supplies debit balance $11,000 Land debit balance $50,000 Accounts Payable credit balance $31,500 The following transactions happened in the month of January. Please make journal entries, post to general ledger, prepare trial balance and from the trial balance prepare Balance Sheet and Income Statement for the month of January 2019 1/1 Bev Zahn invested cash of $21,000 in the business 1/2 Bev purchased land adjacent to the dry cleaner to use as a future parking lot paying cash of $35,000 1/3 the business paid rent for the month $4,000 1/5 the business charged customers for dry cleaning ON ACCOUNT, $72,000 1/10 the business paid their creditors who put the business ON ACCOUNT (the suppliers whom they owe money on) $20,000

Answer 1

	Accounting Equation
			Assets			=	Liability		+	Capital
	Cash	A/c rec	Supplies	land	bank	=	A/c payab	O/s Exp	+
01-11-2016	39000	80000	11000	50000		=	31500		+	148500
						=			+
Transcation						=			+
A					21000	=			+	21000
	39000	80000	11000	50000	21000	=	31500	0	+	169500
B	-35000			35000		=			+
	4000	80000	11000	85000	21000	=	31500	0	+	169500
C	-4000					=			+	-4000
	0	80000	11000	85000	21000	=	31500	0	+	165500
D		72000				=			+	72000
	0	152000	11000	85000	21000	=	31500	0	+	237500
E	0				-20000	=	-20000		+
	0	152000	11000	85000	1000	=	11500	0	+	237500
F			8000			=	8000		+
	0	152000	19000	85000	1000	=	19500	0	+	237500
G	38000					=			+	38000
	38000	152000	19000	85000	1000	=	19500	0	+	275500
H	77000	-77000				=			+
	115000	75000	19000	85000	1000	=	19500	0	+	275500
I						=		29450	+	-29450
	115000	75000	19000	85000	1000	=	19500	29450	+	246050
J	-29200					=			+	-29200
	85800	75000	19000	85000	1000	=	19500	29450	+	216850
K			-7200			=			+	-7200
	85800	75000	11800	85000	1000	=	19500	29450	+	209650
L	-5000					=			+	-5000
	80800	75000	11800	85000	1000	=	19500	29450	+	204650
Income Statement for Nov 16
Revenue										110000
- COGS(op+purchase-supplies)			=11000+8000-11800							-7200
-Direct exp										-29450
-wages										-24000
Gross profit										49350
Indirect exp
- transport exp										-2100
-utilities exp										-1800
-rent paid										-4000
-mis exp										-1300
Net profit										40150
Statement of owner's Equity
Opening Capital										148500
+Addition										21000
-Withdrawal										-5000
+net profit										40150
										204650
Statement of Cash flow
Cash from operating activities
Net Income					40150
-Increase in CA & Decrease in CL
supplies					-800
A/c payable					-12000
+ Increase CL & Decrease in CA
A/c rec					5000
O/s exp					29450
Cash from operating activities										61800
Cash from investing Activites										-35000
land purchased
Cash from Financing activities
Addition					21000
Withdrawal					-5000					16000
	Net Change in Cash									42800
	Add Opening Cash									39000
	Cash & Bank Balance									81800