Swan Dry Cleaners is owned and operated by Peyton

Keyes
Swan Dry Cleaners is owned and operated by Peyton Keyes. 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 and the liabilities of the business on
July 1, 2010, are as follows: Cash, $17,000; Accounts Receivable, $31,000; Supplies, $3,200;
Land, $36,000; Accounts Payable, $10,400. Business transactions during July are summarized
as follows:a. Peyton Keyes invested additional cash in the business with a deposit of $25,000 in
the business bank account.b. Paid $24,000 for the purchase of land as a future building site.c.
Received cash from cash customers for dry cleaning revenue, $19,500.d. Paid rent for the
month, $3,000.e. Purchased supplies on account, $1,550.f. Paid creditors on account, $5,100.g.
Charged customers for dry cleaning revenue on account, $24,750.h. Received monthly invoice
for dry cleaning expense for July (to be paid on August 10), $8,200.i. Paid the following: wages
expense, $5,100; truck expense, $1,200; utilities expense, $800; miscellaneous expense,
$950.j. Received cash from customers on account, $26,750.k. Determined that the cost of
supplies on hand was $1,800; therefore, the cost of supplies used during the month was
$2,950.l. Withdrew $18,000 cash for personal use.Instructions1. Determine the amount of
Peyton Keyes’ capital as of July 1 of the current year.2. State the assets, liabilities, and
owner’s equity as of July 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.3. Prepare an income statement for July, a statement of
owner’s equity for July, and a balance sheet as of July 31.4. (Optional). Prepare a statement of
cash flows for July.View Solution:
Swan Dry Cleaners is owned and operated by Peyton Keyes
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