X Company was created on September 1 and prepares monthly financial statements.
ID: 2484388 • Letter: X
Question
X Company was created on September 1 and prepares monthly financial statements. During September, the company had the following transactions: Received $93,000 from a group of investors and received a $81,000 loan from the bank. Bought $8,976 of merchandise, $3,869 for cash and $5,107 on account. Bought equipment costing $9,600, paying the manufacturer $5,000 in cash and promising to pay the remaining $4,600 next month. Sold merchandise for $20,580, of which $16,407 was for cash and $4,173 was on account; cost of the merchandise was $10,290. Paid $3,927 to suppliers for merchandise previously bought on account. Collected $2,751 from customers on account. Paid wages of $5,770. Paid a total of $538 for rent and insurance in advance. Recorded depreciation of $1,500. Recorded a total of $100 for rent and insurance that had expired. 5. What were total equities on September 30? 6. What was Net Income in September?
Explanation / Answer
Income statement
sales
20580
Purchase of merchandise
8976
Opening stock of merchandise
1314
wages
5770
Depreciation
1500
Rent and insurance
100
Net income
2920
Balancesheet
Liabilities
Assets
Group of investors
93000
Equipment(9600-1500)
8100
Retained earning
2920
Account receivable
4173
Bank loan
81000
Rent and insurance advance
538
account payable
5107
Cash
173774
Accounts payable
4600
186627
186585
Cash/bank
From group of investors
93000
Loan from bank
81000
merchandise purchase
-3869
equipment
-5000
sales
16407
merchandise previously bought
-3927
customers on account
2571
wages
-5770
Rent and insurance
-538
Rent and insurance expired
-100
173774
Income statement
sales
20580
Purchase of merchandise
8976
Opening stock of merchandise
1314
wages
5770
Depreciation
1500
Rent and insurance
100
Net income
2920
Balancesheet
Liabilities
Assets
Group of investors
93000
Equipment(9600-1500)
8100
Retained earning
2920
Account receivable
4173
Bank loan
81000
Rent and insurance advance
538
account payable
5107
Cash
173774
Accounts payable
4600
186627
186585
Cash/bank
From group of investors
93000
Loan from bank
81000
merchandise purchase
-3869
equipment
-5000
sales
16407
merchandise previously bought
-3927
customers on account
2571
wages
-5770
Rent and insurance
-538
Rent and insurance expired
-100
173774
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