X Company is a merchandiser and prepares monthly financial statements. The follo
ID: 2598326 • Letter: X
Question
X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of January:
Balance Sheet
January 1 Assets Equities Cash $53,316 Accounts Payable $55,419 Accounts Receivable 34,278 Wages Payable 1,351 Inventory 76,863 Notes Payable 34,580 Prepaid Rent 5,804 Paid-In Capital 248,076 Equipment 241,047 Retained Earnings 71,882 Total Assets $411,308 Total Equities $411,308
The following summary transactions occurred during January: Sold stock to investors for $40,000. Borrowed $23,000 from a bank. Bought merchandise from suppliers, paying $3,109 and promising to pay $4,894 next month. Bought equipment from a manufacturer, paying $39,400 and promising to pay $4,300 in three months. Paid $3,238 to merchandise suppliers that it had promised to pay. Sold merchandise, receiving $15,993 cash and promises to pay of $4,577; the merchandise that was sold previously cost $10,285. Paid a total of $519 for rent and insurance in advance. Received $3,365 from customers who had promised to pay. Paid $5,660 for wages, utilties, and other miscellaneous expenses. Note: Ignore adjusting entries.
What was the cash balance on January 31?
What were total equities on January 31?
What was net income in January?
Explanation / Answer
a)cash(db)40000
paid in capital(cr) 40000
cash(db)23000
bank payable(cR) 23000
merchandise(db) 8003
cash(cr)3109
acc paybale(cr) 4894
equipment(db) 43700
cash(cr) 39400
notes payable(cr)4300
acc pyable(db) 3238
cash(cr)3238
cash(db) 15993
acc rec(db) 4577
revenue(cr) 20570
cost of goods sold(db) 10285
merchandise(cR) 10285
prepaid expense(db) 519
cash(cr) 519
cash(db) 3365
acc rec (cr) 3365
expenses(db) 5660
cash(cr) 5660
a)cash balance=53316+40000+23000-3109-39400-3238+15993-519+3365-5660=83748
b)Total equites=411308+(20570-5660-10285)=415933
net income=20570-10285-5660=4625
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.