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 $82,000 from a group of investors and received a $89,000 loan from the bank.

2. Bought $8,465 of merchandise, $3,648 for cash and $4,817 on account.

3. Bought equipment costing $9,600, paying the manufacturer $5,000 in cash and promising to pay the remaining $4,600 next month.

4. Sold merchandise for $21,690, of which $16,998 was for cash and $4,692 was on account; cost of the merchandise was $10,845.

5. Paid $3,130 to suppliers for merchandise previously bought on account.

6. Collected $2,706 from customers on account.

7. Paid wages of $5,370.

8. Paid a total of $513 for rent and insurance in advance.

9. Recorded depreciation of $1,850.

10. Recorded a total of $104 for rent and insurance that had expired.

What were total equitites on September 30th?

Explanation / Answer

Transaction Assets= Liabilities+ Owners' Equity 1 Cash 82000 0 82000 Cash 89000 89000 0 2 Merchandise 8465 Cash -3648 4817 0 3 Equipment 9600 Cash -5000 4600 0 4 Cash 16998 A/cs. Receivables 4692 21690 Merchandise -10845 -10845 5 Cash -3130 -3130 6 Cash 2706 A/cs. Receivables -2706 7 Cash -5370 -5370 8 Prepaid Expense 513 Cash -513 9 Depreciation -1850 -1850 10 Rent& Ins. Expensed -104 -104 Total 180808 95287 85521 Total Equities = 85521

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