X Company was created on September 1 and prepares monthly financial statements.

ID: 2483710 • Letter: X

Question

X Company was created on September 1 and prepares monthly financial statements. During September, the company had the following transactions:

1. Received $87,000 from a group of investors and received a $92,000 loan from the bank.

2. Bought $8,951 of merchandise, $3,009 for cash and $5,942 on account.

3. Bought equipment costing $10,000, paying the manufacturer $5,500 in cash and promising to pay the remaining $4,500 next month.

4. Sold merchandise for $22,360, of which $17,702 was for cash and $4,658 was on account; cost of the merchandise was $11,180.

5. Paid $3,904 to suppliers for merchandise previously bought on account.

6. Collected $2,839 from customers on account.

7. Paid wages of $5,500.

8. Paid a total of $523 for rent and insurance in advance.

9. Recorded depreciation of $1,650.

10. Recorded a total of $108 for rent and insurance that had expired.

a. What were total equities on September 30?

b. What was Net Income in September?

Total equities :

Common stock 87000

Retained earning 3922

Total equity 90922

sales [22360 22360 Less:cost cost of sales [11180] 11180 wages 5500 Rent 108 Depreciation 1650 net income 3922

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