Answer:
1) equity = assets - liabilities
equity = $45,000 + $93,000 + $7,000 + $75,000 - $40,000 = $180,000
2) Since there is not enough room here, I used an excel spreadsheet to prepare the accounting equation.
3) D’Lite Dry Cleaners
Income Statement
For the month ended July 31, 202x
Revenues $116,875
Expenses:
- Dry cleaning expense $29,500
- Rent expense $6,000
- Wages expense $7,500
- Truck expense $2,500
- Supplies expense $3,600
- Utilities expense $1,300
- Miscellaneous expense $2,700 ($53,100)
Net income $63,775
D’Lite Dry Cleaners
Balance Sheet
For the month ended July 31, 202x
Assets:
Cash $95,325
Accounts receivable $89,750
Supplies $5,900
Land $125,000
Total assets $315,975
Liabilities:
Accounts payable $49,200
Equity:
Capital $266,775
Total liabilities and equity $315,975
D’Lite Dry Cleaners
Statement of Owner’s Equity
For the month ended July 31, 202x
Palk, Joel, capital, beginning balance $180,000
Additional capital raised $35,000
<u>net income $63,775</u>
subtotal $278,775
<u>drawings ($12,000)</u>
Palk, Joel, capital, ending balance $266,775
