Company was created on September 1 and prepares monthly financial statements. Du

Question

Company was created on September 1 and prepares monthly financial statements. During September, the compo d the following transactions: What were total equities on September 30? What was Net Income in September? Company prepares monthly financial statements. The company rents a fax machine. The rental agreement calls for 100 lump sum payment at the beginning of each month, plus an additional $0.08 per fax sent during the month, able on the 10th of the following month. In July, 1,600 faxes were sent; in August 1,500 faxes were sent. Company's July Income Statement, telephone expense was

Explanation / Answer

1. Total equities on September 30 will be the amount invested by the group of investors that is $83,000 plus the net income for the month of September.

Compute the net income for September as follows:

Net income = Sales - Cost of merchandise sold - Wages - depreciation - rent and insurance

= $21,740 - $10,870 - $5,260 - $1,600 - $104

= $3,906

Therefore,

Total equities on September 30 = $83,000 + $3,906 = $86,906

2. The net income in September is $3,096 (computed above).

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