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

Question

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

1. Received $93,000 from a group of investors and received a $80,000 loan from the bank.

2. Bought $8,913 of merchandise, $3,011 for cash and $5,902 on account.

3. Bought equipment costing $9,700, paying the manufacturer $5,700 in cash and promising to pay the remaining $4,000 next month.

4. Sold merchandise for $20,890, of which $15,997 was for cash and $4,893 was on account; cost of the merchandise was $10,445.

5. Paid $3,188 to suppliers for merchandise previously bought on account.

6. Collected $2,897 from customers on account.

7. Paid wages of $5,560.

8. Paid a total of $592 for rent and insurance in advance.

9. Recorded depreciation of $1,700.

10. Recorded a total of $122 for rent and insurance that had expired.

Question 1. What were total equities on September 30?

Question 2. What was Net Income in September?

Please give me exact answer for number 1 and 2 help!

Explanation / Answer

Cash Dr 93000          Common stock Cr 93000 Cash Dr 80000            Loan Cr 80000 Inventory Dr 8913             Cash Cr 3011              Accounts payable Cr 5902 Equiment Dr 9700             Cash Cr 5700              Accounts payable Cr 4000 Cash Dr 15997 Accounts receivable Dr 4893              Sales Cr 20890 Cost of goods sold Dr 10445             Inventory Cr 10445 Accounts payable t Dr 3188             Cash Cr 3188 Cash Dr 2897          Accounts receivable Cr 2897 Wages Dr 5560         Cash Cr 5560 Prepaid expneses Dr 592        Cash Cr 592 Depriciation Dr 1700        Accumulated dep Cr 1700 Expenses Dr 122         Prepaid expenses Cr 122 1) Total equities Initial investor contribution 93000 Add : Net income for September 3063 ( refer below) Total equities 96063 2) Net Income Sales 20890 Less : Cost of goods sold 10445 Gross profit 10445 Less Expenses 122 Depriciation 1700 Wages 5560 7382 Net Income 3063

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