X Company is a merchandiser and prepares monthly financial statements. The follo

Question

X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of January Balance Sheet January1 Equities Assets Cash Accounts Receivable Inventory Prepaid Rent Equipment Total Assets $52,160 1,488 33,534 265,682 60,447 $413,311 $52,962 Accounts Payable 33,426 Wages Payable 76,673 Notes Payable 5,320 Paid-In Capital 244,930 Retained Earnings $413,311 Total Equities The following summary transactions occurred during January: 1. Sold stock to investors for $40,000 2. Borrowed $28,000 from a bank. 3. Bought merchandise from suppliers, paying $3,548 and promising to pay $4,622 next month. 4. Bought equipment from a manufacturer, paying $31,100 and promising to pay $4,700 in three months. 5. Paid $3,139 to merchandise suppliers that it had promised to pay 6. Sold merchandise, receiving $16,280 cash and promises to pay of $4,930; the merchandise that was sold previously cost $10,605 7. Paid a total of $539 for rent and insurance in advance. 8. Received $3,654 from customers who had promised to pay 9. Paid $5,460 for wages, utilties, and other miscellaneous expenses. Note: Ignore adjusting entries 4. What was the cash balance on January 31? $97,110 You are correct. Your receipt no. is 152-2283 5. What were total equities on January 31? 361129 Submit Answer Incorrect. Tries 1/3 Previous Tries 6. What was net income in January? $5,145 You are correct. Your receipt no. is 152-9893

Explanation / Answer

Particulars Amount($) Equities Balance as on 1st January 413311 Add: Borrowed from Bank 28000 Add: Bought Merchandise from supplier 4622 Add: Bought Equipment 4700 Less: Payment made to merchandise supplier -3139 Less: Paid wages -1488 Equities Balance as on January 31 446006

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