PR 1-5A

1. Determine the amount of Maria Acosta’s capital as of November 1.

Maria Acosta's capital = Total Assets - Liabilities
= (34.200 + 50.000 + 40.000 + 5.000) - 16.400
= 129.200 - 16.400
= 112.800

2. State the assets, liabilities, and owner’s 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.

Assets = Liabilities + Owner's Equity

129.200 = 16.400 + 112.800

3. Prepare an income statement for November, a statement of owner’s equity for

November, and a balance sheet as of November 30.

4. (Optional) Prepare a statement of cash flows for November.

 2. The table is as follow:

Assets = Liabilities +
Maria Maria
Accounts Accounts Acosta's Acosta's
Cash Land Receivable Supplies Payable Capital Drawing
$ 34,200 $ 50,000 $ 40,000 $ 5,000 $ 16,400 $ 112,800
a. $ 35,000 $ 35,000
Bal. $ 69,200 $ 50,000 $ 40,000 $ 5,000 $ 16,400 $ 147,800
b. $ (30,000) $ 30,000
Bal. $ 39,200 $ 80,000 $ 40,000 $ 5,000 $ 16,400 $ 147,800
c. $ (4,500)
Bal $ 34,700 $ 80,000 $ 40,000 $ 5,000 $ 16,400 $ 147,800
d. $ 18,250
Bal. $ 34,700 $ 80,000 $ 58,250 $ 5,000 $ 16,400 $ 147,800
e. $ (9,000) $ (9,000)
Bal. $ 25,700 $ 80,000 $ 58,250 $ 5,000 $ 7,400 $ 147,800
f. $ 2,800 $ 2,800
Bal. $ 25,700 $ 80,000 $ 58,250 $ 7,800 $ 10,200 $ 147,800
g. $ 31,750
Bal. $ 57,450 $ 80,000 $ 58,250 $ 7,800 $ 10,200 $ 147,800
h. $ 27,800 $ (27,800)
Bal. $ 85,250 $ 80,000 $ 30,450 $ 7,800 $ 10,200 $ 147,800
i. $ 14,800
Bal. $ 85,250 $ 80,000 $ 30,450 $ 7,800 $ 25,000 $ 147,800
j. $ (12,500)
Bal. $ 72,750 $ 80,000 $ 30,450 $ 7,800 $ 25,000 $ 147,800
k. $ (4,250)
Bal. $ 72,750 $ 80,000 $ 30,450 $ 3,550 $ 25,000 $ 147,800
l. $ (10,000) $ (10,000)
Bal. $ 62,750 $ 80,000 $ 30,450 $ 3,550 $ 25,000 $ 147,800 $ (10,000)
 Owner's Equity
Dry
Fees Rent Supplies Cleaning Wages Truck Utilities Misc.
Earned Expense Expense Expense Expense Expense Expense Expense

$ (4,500)
$ (4,500)
$ 18,250
$ 18,250 $ (4,500)

$ 18,250 $ (4,500)

$ 18,250 $ (4,500)
$ 31,750
$ 50,000 $ (4,500)

$ 50,000 $ (4,500)
$ (14,800)
$ 50,000 $ (4,500) $ (14,800)
$ (8,200) $ (1,875) $ (1,575) $ (850)
$ 50,000 $ (4,500) $ (14,800) $ (8,200) $ (1,875) $ (1,575) $ (850)
$ (4,250)
$ 50,000 $ (4,500) $ (4,250) $ (14,800) $ (8,200) $ (1,875) $ (1,575) $ (850)

$ 50,000 $ (4,500) $ (4,250) $ (14,800) $ (8,200) $ (1,875) $ (1,575) $ (850)

3. The income statement is as follow:

Colfax Dry Cleaners, Maria Acosta

Income Statement
For the month ended November 30, 2010

Fees earned $ 50,000

Expenses:
Rent expense $ 4,500
Supplies expense $ 4,250
Dry cleaning expense $ 14,800
Wages expense $ 8,200
Truck expense $ 1,875
Utility expense $ 1,575
Misc. expense $ 850
Total expenses $ 36,050
Net income $ 13,950
3. The statement of owner's equity is as follow:

Colfax Dry Cleaners, Maria Acosta

Statement of Owner's Equity
For the month ended November 30, 2010

Maria Acosta, Capital, November 1, 2010 $ 112,800

Investment on November 1, 2010 $ 35,000
Net income for November $ 13,950
$ 48,950
Less withdrawals $ 10,000
Increase in owner's equity $ 38,950
Maria Acosta, Capital, November 30, 2010 $ 151,750
3. The balance sheet is as follow:

Colfax Dry Cleaners, Maria Acosta

Balance Sheet
30-Nov-10

Assets Liabilities
Cash $ 62,750 Accounts payable $ 25,000
Supplies $ 3,550
Land $ 80,000 Owner's Equity
Accounts receivable $ 30,450 Maria Acosta, capital $ 151,750
Total liabilities and
Total assets $ 176,750 owner's equity $ 176,750
4. The statement of cash flows are as follow:

Colfax Dry Cleaners, Maria Acosta

Statement of Cash Flows
For the month ended November 30, 2010

Cash flows from operating activities

Cash received from customers $ 59,950
Deduct cash payments for expenses and payments to creditors $ (26,000)
Net cash flow from operating activities $ 33,950
Cash flows from investing activities
Cash payments for acquisition of land $ (30,000)
Cash flows from financing activities
Cash received as owner's investment $ 35,000
Deduct cash withdrawal by owner $ (10,000)
Net cash flow from financing activities $ 25,000
Net increase in cash $ 28,550
Cash as of November 1, 2010 $ 34,200
Net cash flow and November, 30, 2010, cash balance $ 62,750