Explore BrainMass

Explore BrainMass

    Colfax Dry Cleaners - Income Statement, Retained Earnings

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Colfax Dry Cleaners is owned and operated by Maria Acosta. 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 capital stock of the business on November 1, 2010 are as follows:

    Cash: $34,200
    Accounts Receivable: $40,000
    Supplies: $5,000
    Land: $50,000
    Accounts Payable: $16,400
    Capital Stock: $10,000

    Business transactions during November are summarized as follows:

    1 Maria Acosta invested additional cash in the business with a deposit of $35,000 in exchange for capital stock.
    2 Purchased land for use as a parking lot, paying cash of $30,000.
    3 Paid rent for the month, $4,500.
    4 Charged customers for dry cleaning revenue on account, $18,250.
    5 Paid creditors for account, $9,000.
    6 Purchased supplies on account, $2,800.
    7 Received cash from cash customers for dry cleaning revenue, $31,750.
    8 Received cash from customers on account, $27,800.
    9 Received monthly invoice for dry cleaning expense for November (to be paid on December 10) $14,800.
    10 Paid the following: wages expense, $8,200; truck expense, $1,875; utilities expense, $1,575; miscellaneous expense, $850.
    11 Determined that the cost of supplies on hand was $3,550; therefore, the cost of supplies used during the month was $4,250.
    12 Paid dividends, $10,000.

    © BrainMass Inc. brainmass.com March 4, 2021, 11:18 pm ad1c9bdddf

    Solution Preview

    Your tutorial is attached in excel (click in cells to see computations). I solved for beginning RE by plugging to get the ...

    Solution Summary

    Your tutorial is attached in excel (click in cells to see computations). I solved for beginning RE by plugging to get the balance sheet to balance. Each transaction is placed in the accounting equation format and shows how the income statement and balance sheet change with each event. An income statement, balance sheet, and statement of changes in retained earnings is completed for you. This is now a template to use for other problems. Change the data and the financial statements update.