Lenny's Lawn Service, Inc. Transactions Additional Information - - July 2021 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.) July 1 Receive $79,700.00 cash from new investors, and issue $79,700.00 of Common Stock to them. July 1 Purchase $60,600.00 of new mowing equipment, paying cash to the mower dealer. July 1 Pay $500.00 cash for the July truck rental. July 3 Invoice a new customer $7,210.00 for a completed mowing job - customer will pay in 10 days. July 5 The Board of Directors declares a cash dividend. The total amount of the dividend is $30,000.00 The Date of Record is set as July 15. The Date of Payment is set as July 31. July 7 Pay the employees $5,900.00 for work performed during the 1st week of July. July 10 Complete a mowing job for a new customer customer pays $4,250.00 cash for the job. July 12 Conect $3,500.00 cash from the golf course for special rush mowing job completed on May 31. July 14 Pay the employees $7,100.00 for work performed during the 2nd week of July. July 15 Purchase $1,825.00 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 $7,210.00 on account. The cash that is received is from the new customer for the job CL DAY Eun Trial Ral IS & SEquity BalSht Post Close TB that was somulated an u July 14 Pay the employees $7,100.00 for work performed during the 2nd week of July. July 15 Purchase $1,825.00 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 $7,210.00 on account. The cash that is received is from the new customer for the job that was completed on July 3. July 17 One of the original mowers purchased in January of 2020 broke down and is repaired by the mower dealer. The cost of the Mower Repair job is $930.00. Lenny's will pay the mower dealer in 30 days. July 19 Purchase for cash $26,950.00 of supplies. These supplies will be consumed over the next 12 months. July 20 Collect $30,000.00 from the property management company for work performed in June. July 21 Pay the employees $7,500.00 for work performed during the 3rd week of July. July 23 Receive a $29,025.00 advance payment from the university. The advance payment is for 6 months of work which will be performed from August 1, 2021 to January 31, 2022. July 25 Complete a special mowing job for the golf course. The total price for the mowing job is $6,700.00. The golf course pays $1,000.00 cash on this date and will pay the remainder on August 25. July 27 Complete a mowing job for a new customer customer pays $3,725.00 cash for the job. + July 27 Pay $1,825.00 cash to the mower dealer for the supplies purchased on account on July 15. July 28 Pay the employees $6,890.00 for work performed during the 4th week of July. July 31 Invoice the property management company $23,950.00 for July mowing work. The property management company will pay the invoice on the 20th of next month. July 31 Pay the cash dividend which was declared on July 5. ICO, Cuity RalSht Post Close TB Jx Equipment: Supplies: Mowing Service at the University: Wages Due the Employees: Bank Loan: Additional Information The $48,000.00 beginning balance in the Equipment account relates to the mowing equipment which was purchased on January 2, 2020. For information related to this mowing equipment see Page 70 in the Solid Footing text (PDF 07 - Intro to Adjusting Entries). 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, 2021: The new equipment was placed into service on July 1, 2021 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. At the end of July there are $27,930.00 supplies on-hand. The monthly mowing service was provided to the university per the contract signed on April 1, 2021. For information on the contract with the university and the related advance payment, see Pages 95 and 98 in the Solid Footing text (PDF 08 - Adjusting Entries Continued). The last wage payment was made to the employees on July 28, 2021. The employees worked on July 29, 30, and 31. For these three days of work the employees earned $2,445.00 of wages. These three days of wages will be paid to the workers during the first week of August. The interest on the loan from 1st Bank will be paid every three months. The first interest payment to the bank will be made on September 30, 2021. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $855.00. + Lenny's Lawn Service, Inc. - Chart of Accounts Account # Account Name Assets: 100 Cash 105 Accounts Receivable 110 Supplies 150 155 Equipment 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 500 505 510 515 520 Depreciation Expense 550 Expenses: Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Interest Expense + Lenny's Lawn Service, Inc. - General Journal Page # 1 2021 Account Account Name Posted Debit Credit Month-Day Number 7-1 100 Cash X 35,000.00 250 Notes Payable X 35,000.00 Borrowed on Note Payable Lenny's Lawn Service, Inc. - General Journal Page # 2 2021 Account Month-Day Number Account Name Posted: Debit Credit + IC 9. CEquity BalSht Lenny's Lawn Service, Inc. - 2021 Account Account Name Month-Day Number General Journal Page # 3 Posted Debit Credit Lenny's Lawn Service, Inc. - General Journal Page # 4 2021 Account Month-Day Number Account Name Posted Debit Credit Lenny's Lawn Service, Inc. General Journal - Page # 5 2021 Account Month-Day Number Account Name Posted Debit Credit Lenny's Lawn Service, Inc. - General Ledger Account # 100 Cash 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 7-1 1 38,250.00 35,000.00 38,250.00 Dr 73,250.00 Dr Account # 105 Accounts Receivable 2021 Journal Debit Credit Enter typing Do N Gene Balance Trial Ral IS & SEquity BalSI Account # 105 Accounts Receivable 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 33,500.00 33,500.00 Dr Account # 110 Supplies 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 4,375.00 4,375.00 Dr Account # 150 Equipment 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 48,000.00 48,000.00 Dr Directione Trane Chart Amate CL Day Eve Trial Dal IC 8. Stavity Balch+ Account # 110 Supplies 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 4,375.00 4,375.00 Dr Account # 150 Equipment 2021 Month-Day Journal Debit Credit Page # Balance 7-1 Beginning Balance 48,000.00 48,000.00 Dr Account # 155 Accumulated Depreciation 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 18,000.00 18,000.00 Cr Lenny's Lawn Service, Inc. - General Ledger Account # 200 Accounts Payable 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 0.00 0.00 Cr Account # 205 Wages Payable 2021 Month-Day 7-1 Journal Page # Debit Credit Balance Beginning Balance 0.00 0.00 Cr Account # 210 Interest Payable 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 215 Unearned Revenue Ente typin Do N Gene Account # 205 Wages Payable 2021 Journal Debit Credit Month-Day Page # 7-1 Beginning Balance 0.00 Balance 0.00 Cr Account # 210 Interest Payable 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 215 Unearned Revenue 2021 Month-Day Journal Page # Debit Credit 7-1 Beginning Balance Account # 220 Dividends Payable 2021 Month-Day 8,000.00 Balance 8,000.00 Cr Journal Page # Debit Credit Balance Account # 215 Unearned Revenue 2021 Journal Month-Day 7-1 Debit Credit Page # Beginning Balance 8,000.00 Balance 8,000.00 Cr Account # 220 Dividends Payable 2021 Journal Debit Credit Balance Month-Day Page # 7-1 Beginning Balance 0.00 0.00 Cr Account # 250 Note Payable 2021 Journal Debit Credit Month-Day Balance Page # 7-1 Beginning Balance 7-1 1 0.00 35,000.00 0.00 Cr 35,000.00 Cr Account # 300 Common Stock Direction Lenny's Lawn Service, Inc. - General Ledger Account # 400 Service Revenue 2021 Month-Day 7-1 Journal Page # Debit Credit Balance Beginning Balance 0.00 0.00 Cr Account # 500 Supplies Expense 2021 Month-Day Journal Debit Credit Balance Page # 7-1 Beginning Balance 0.00 0.00 Dr Expence CAUTION Enter amounts into the accounts by typing in the amounts. Do NOT copy cells from the General Journal into the accounts. TO Account # 510 Wages Expense 2021 Journal Debit Credit Balance Month-Day Page # 7-1 Beginning Balance 0.00 0.00 Dr Account # 515 Truck Rental Expense 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 520 Depreciation Expense 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 515 Truck Rental Expense 2021 Month-Day 7-1 Journal Page # Debit Credit Balance Beginning Balance 0.00 0.00 Dr Account # 520 Depreciation Expense 2021 Month-Day Journal Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 550 Interest Expense 2021 Month-Day Journal Debit Credit Page # Balance 7-1 Beginning Balance 0.00 0.00 Dr Lenny's - July 31, 2021 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 215 220 Unearned Revenue 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 CAUTI Enter amounts into the Pr typing in the amounts. Do NOT copy cells from th Lenny's Lawn Service, Inc. Income Statement for the Month Ended July 31, 2021 Service Revenue Operating Expenses: Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Total Operating Expenses Income from Operations 0.00 0.00 Interest Expense Net Income (Loss) $0.00 CAUTION Enter amounts into the Financial Statements by typing in the amounts. Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance. Note the new line item on Lenny's Income Statement Income from Operations. This is Lenny's income from the normal operations of the lawn mowing business. Interest Expense, which is not a cost of operating the business but rather a cost of financing the business, is shown below Income from Operations. Interest Expense is subtracted from Income from Operations to arrive at Net Income. Lenny's Lawn Service, Inc. Statement of Stockholders' Equity for the Month Ended July 31, 2021 Common Retained Stock Earnings Total Beginning Balance July 1, 2021 Issue Common Stock Net Income (Loss) $0.00 0.00 0.00 Dividends Ending Balance July 31, 2021 $0.00 $0.00 0.00 $0.00 This is the first time you have prepared a formal Statement of Stockholders' Equity for Lenny's. This statement shows what caused the change in Common Stock and in Retained Earnings from July 1, 2021 to July 31, 2021. Note that the Retained Earnings column on the statement looks different than the calculation you have been doing each month to determine the Retained Earnings 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 Earnings 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, 2021 CAUTION Enter amounts into the Balance Sheet by typing in the amounts. Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance. Assets Current Assets: Cash Accounts Receivable Supplies Total Current Assets 0.00 Property & Equipment: Equipment Accumulated Depreciation Property & Equipment, net Total Assets 0.00 $0.00 Liabilities & Stockholders' Equity Current Liabilities: Accounts Payable Wages Payable Interest Payable Unearned Revenue Total Current Liabilities 0.00 Long-Term Liabilities: Note Payable Total Liabilities 0.00 Stockholders' Equity. Common Stock Retained Earnings Total Stockholders' Equity 0.00 Total Liabilities & Stockholders' Equity $0.00 Note the following three new sub-totals appearing on Lenny's Balance Sheet: Total Current Assets is a total of those assets, which will turn-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-term. 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 Uneamed Revenue, this current liability will be "paid-off" by Lenny's delivering mowing services to the university. - Lenny's July 31, 2021 Post-Closing Trial Balance Account # Account Name 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 510 515 520 Wages Expense Truck Rental Expense Depreciation Expense 550 Interest Expense Debit Credit Enter amour typing in the Do NOT cop: Totals 0.00 0.00