July 2019 Transactions Date Description of the Transaction July 1 Borrow $35,000.00 from 1st Bank by signing a 24 month note. (As an example of how to journalize and post a transaction -- this transaction has already been entered into the General Journal and posted to the General Ledger.) D July 1 Receive $77,850.00 cash from new investors, and issue $77,850.00 of Common Stock to them. |:| July 1 Purchase $42,000.00 of new mowing equipment, paying cash to the mower dealer. D July 1 Pay $500.00 cash for the July truck rental. |:I July 3 Invoice a new customer $2,475.00 for a completed mowing job customer will pay in 10 days. D July 5 The Board of Directors declares a cash dividend. The total amount of the dividend is $22,500.00 The Date of Record is set as July 15. The Date of Payment is set as July 31. D July 7 Pay the employees $6,000.00 for work performed during the 1st week of July. |:| July 10 Complete a mowing job for a new customer customer pays $6,500.00 cash for the job. D July 12 Collect $3,500.00 cash from the golf course for special rush mowing job completed on May 31. D July 14 Pay the employees $7,500.00 for work performed during the 2nd week of July. I: July 15 Purchase $1,180.00 of supplies from the mower dealer. The supplies are consumed immediately. Lenny's will pay the mower dealer for the supplies in about 2 weeks. |:| July 15 Collect $2,475.00 on account. The cash that is received is from the new customer for thejob that was completed on July 3. D July 17 One of the original mowers purchased in January of 2018 broke down and is repaired by the mower dealer. The cost of the Mower Repairjob is $685.00. Lenny's will pay the mower dealer in 30 days D July 19 Purchase for cash $21,000.00 of supplies. These supplies will be consumed over the next 12 mon hs. |:| July 20 Collect $30,000.00 from the property management company for work performed in June. |:| July 21 Pay the employees $6,850.00 for work performed during the 3rd week of July. July 23 Receive a $27,000.00 advance payment from the university. The advance payment Is for 6 month of work which will be performed from August 1, 2019 to January 31 2020. |:| July 25 Complete a special mowing job for the golf course. The total price for the mowing job is $3,700.00. The golf course pays $500.00 cash on this date and will pay the remainder on August 25. Account # 510 Wages Expense 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 515 Truck Rental Expense 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 520 Depreciation Expense 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr\fLenny's - July 31, 2019 Pre-Closing Trial Balance Account # Account Name Debit Credit 100 Cash 105 Accounts Receivable 110 Supplies 150 Equipment 155 Accumulated Depreciation 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable 300 Common Stock 305 Retained Earnings 400 Service Revenue 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest Expense Totals 0.00 0.00Lenny's Lawn Service, Inc. Income Statement for the Month Ended July 31, 2019 |:I w Enter amounts into the Financial Statements by typing in the amounts. Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance. Service Revenue Operating Expenses: Note the newline item on Lenny's Income Statement Supplies (Income from Operations. This is Lenny's income from Mower Repair the normal operations of the lawn mowing business. Wages / Interest Expense, which is not a cost of operating the Truck Rental business but rather a cost of financing the business, is shown Depreciation , below Income from Operations. Interest Expense is subtracted Total Operating Expenses 0.00 , " x ' from Income from Operations to arrive at Net Income. Income from Operations 0.00, Interest Expense w' Net Income $0 00 This is the first time you have prepared a fom'ial Statement of .Stockholders' Equity for Lenny's. This statement shows what caused the change in Common Stock and in Retained Eamings Lenny's Lawn Service, Inc. ' ,, Statement of Stockholders' Equity * ' for the Monl Ended July 31, 2019 ' ,/ Common Retained'x'/ M Earnings 1911 "" Beginning Balance July 1, 2019 m 4r\" $0.00 Issue Common Stock 0.00 Net Income ' \"000' ' Dividends 4\"" 9,0,0. Ending Balance July 31, 2019 $0.00 $0. 00 - \"\"\" $0.00 from July 1, 2019 to July 31, 2019. Note that the Retained Earnings column on the statement looks different than the calculation you have been doing each month to determine the Retained Eamings amount needed for the Balance Sheet. Beginning Balance is the , starting amount. In previous Retained Earnings calculations, you used Current Balance as the starting amount. Beginning Balance is the starting point for this calculation, because Dividends is shown ,as a line item (a deduction) in the Retained Eamings column. ._ The Ending Balance in the Retained Earnings column is the balance needed for the Balance Sheet. Lenny's Lawn Service, Inc. Balance Sheet as of July 31, 2019 Assets Current Assets: Cash Accounts Receivable Supplies Total Current Assets Property & Equipment: 0.00.- Equipment Accumulated Depreciation M. Property & Equipment, net Total Assets $ .00 Liabilities & Stockholders' Equity Current Liabilities: Accounts Payable Wages Payable Interest Payable Unearned Revenue Total Current Liabilities 0.06 , W Notepayame r:::::3 Total Liabilities 0.00 Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity 0 00 Total Liabilities & Stockholders' Equity $0.0 O Q A u T I Q N Enter amounts into the Balance Sheet b typin in the amounts. Do NOT copy cells from the General Le ger or re-Clostng Tnal Balance. Note the following three new sub-totals appearing on Lenny's Balance Sheet: Total Current Assets is a total of those assets, "which will tum-into cash during the next 12 months or be consumed during the next 12 months. The comparison of Total Current Assets to Total Current Liabilities gives some indication of Lenny's liquidity that is, its ability to pay its bills in the short-tenn. Property & Equipment, net is the amount of Fixed '~ Asset cost, which remains to be depreciated in future accounting periods. Total Current Liabilities is a total of those liabilities that will require payment in the next 12 months. In the case of Unearned Revenue. this . 'current liability will be "paid-oft\" by Lenny's delivering mowing services to the university. Lenny's - July 31, 2019 Post-Closing Trial Balance Account # Account Name Debit Credit CAUTION Enter amounts into the Post-Closing Trial Balance by 100 Cash typing in the amounts. 105 Accounts Receivable 110 Supplies Do NOT copy cells from the General Ledger. 150 Equipment 155 Accumulated Depreciation 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable 300 Common Stock 305 Retained Earnings 400 Service Revenue 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest Expense Totals 0.00 0.00|:| July 27 Complete a mowing job for a new customer customer pays $3,800.00 cash for the job. I: July 27 Pay $1,180.00 cash to the mower dealer for the supplies purchased on account on July 15. D July 28 Pay the employees $5,300.00 for work performed during the 4th week of July. |:| July 31 Invoice the property management company $16,300.00 for July mowing work. The property management company will pay the invoice on the 20th of next month. D July 31 Pay the cash dividend which was declared on July 5. Additional Information Equipment: The $48,000.00 beginning balance in the Equipment account relates to the mowing equipment which was purchased on January 2, 2018. For information related to this mowing equipment see Page 70 in the Solid Footing book. This equipment continues to be used and should be depreciated for the month of July. The following information relates to the new equipment which was purchased on July 1, 2019: > The new equipment was placed into service on July 1, 2019 and should be depreciated for the month of July. > The estimated useful life of the new equipment is 5 years. > At the end of 5 years, the new equipment will have no future value and will be scrapped. > The new equipment will be depreciated using the straight-line method. Supplies: At the end of July there are $21,600.00 supplies onhand. Mowing Service at the University: The monthly mowing service was provided to the university per the contract signed on April 1, 201'. For information on the contract with the university and the related advance payment, see Pages 95 and 98 in the Solid Footing book. Wages Due the Employees: The last wage payment was made to the employees on July 28, 2019. The employees worked on July 29, 30, and 31. For these three days of work the employees eamed $2,375.00 of wages. These three days of wages will be paid to the workers during the first week of August. Bank Loan: The interest on the loan from 1st Bank will be paid every three months. The rst interest payment to the bank will be made on September 30, 2019. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $725.00. Lenny's Lawn Service, Inc. - Chart of Accounts Account # Account Name Assets: 100 Cash 105 Accounts Receivable 110 Supplies 150 Equipment 155 Accumulated Depreciation Liabilities: 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable Equity: 300 Common Stock 305 Retained Earnings Revenues: 400 Service Revenue Expenses: 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest ExpenseLenny's Lawn Service, Inc. - General Journal Page # 1 2019 Account Month-Day Number Account Name Posted Debit Credit 7-1 100 Cash X 35,000.00 250 Notes Payable X 35,000.00 Borrowed on Note PayableAccount # 100 Cash 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 38,250.00 38,250.00 Dr 7-1 1 35,000.00 73,250.00 Dr Account # 105 Accounts Receivable 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 33,500.00 33,500.00 DrAccount # 110 Supplies 2019 Journal Page # Debit Credit Balance Month-Day 7-1 Beginning Balance 4,375.00 4,375.00 Dr Account # 150 Equipment 2019 Journal Page # Debit Credit Balance Month-Day 7-1 Beginning Balance 48,000.00 48,000.00 Dr Account # 155 Accumulated Depreciation 2019 Journal Page # Debit Credit Balance Month-Day 7-1 Beginning Balance 18,000.00 18,000.00 Cr\fAccount # 220 Dividends Payable 2019 Journal Credit Balance Month-Day Page # Debit 7-1 Beginning Balance 0.00 0.00 Cr Account # 250 Note Payable 2019 Journal Page # Debit Credit Balance Month-Day 7-1 Beginning Balance 0.00 0.00 Cr 7-1 35,000.00 35,000.00 Cr Account # 300 Common Stock 2019 Journal Debit Credit Balance Month-Day Page # 7-1 Beginning Balance 50,000.00 50,000.00 Cr Account # 305 Retained Earnings 2019 Journal Balance Page # Debit Credit Month-Day 7-1 Beginning Balance 48, 125.00 48, 125.00 CrAccount # 400 Service Revenue 2019 Journal Credit Balance Month-Day Page # Debit 7-1 Beginning Balance 0.00 0.00 Cr Account # 500 Supplies Expense 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 505 Mower Repair Expense 2019 Journal Page # Debit Credit Balance Month-Day 7-1 Beginning Balance 0.00 0.00 Dr