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:

Received $97,000 from a group of investors and received a $91,000 loan from the bank.

Bought $8,478 of merchandise, $3,784 for cash and $4,694 on account.

Bought equipment costing $9,900, paying the manufacturer $5,200 in cash and promising to pay the remaining $4,700 next month.

Sold merchandise for $21,230, of which $16,453 was for cash and $4,777 was on account; cost of the merchandise was $10,615.

Paid $3,919 to suppliers for merchandise previously bought on account.

Collected $2,981 from customers on account.

Paid wages of $5,190.

Paid a total of $532 for rent and insurance in advance.

Recorded depreciation of $1,600.

Recorded a total of $109 for rent and insurance that had expired.

5. What were total equities on September 30?

Explanation / Answer

X Company Income Statement fo the month ended 30th Sep Details Amt $ Sales revenue               21,230 Less Cost of Merchandise sold               10,615 Gross Profit               10,615 Wages Expense                  5,190 Depreciation Expense                  1,600 Rent And Insurance expense                     109 Net Income                  3,716 Shareholders Equity Details Amt $ Opening amt invested                 97,000 Add : Net Income transfer to Retained Earning                  3,716 Closing Balance Equity Sep 30             100,716

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