Question

X Company was created on September 1 and prepares monthly financial statements. During September, X Company

issued stock to investors for $86,000,

borrowed $100,000 from a bank,

bought merchandise that it planned to sell, paying $3,557 and promising to pay $4,926 in October,

bought equipment, paying $5,900 and promising to pay $4,300 in December,

paid $3,606 that it had promised to pay to suppliers for previous purchases on account,

sold merchandise, receiving cash of $17,047 and promises to pay from customers of $4,293; the merchandise that was sold had cost $10,670,

paid off a loan for $3,820 [ignore interest],

received $2,693 from customers who had promised to pay,

paid $5,900 for wages, utilties, and other miscellaneous expenses.

4. What were total assets on September 30 [assume no adjusting entries on September 30]?

5. What was Net Income in September [assume no adjusting entries on September 30]?

Answer 1

4. Total assets on September 30: $192570

5. Net income in September: $4770

Working:

	Assets				Liabilities	Equity		Income Statement
Event	Cash	Receivables	Inventory	Equipment		Stock	Retained Earnings	Revenue	-	Expense	=	Net income
1	86000					86000
2	100000				100000
3	-3557		8483		4926
4	-5900			10200	4300
5	-3606				-3606
6	17047	4293					21340	21340				21340
			-10670				-10670			10670		-10670
7	-3820				-3820
8	2693	-2693
9	-5900						-5900			5900		-5900
	182957	1600	-2187	10200	101800	86000	4770	21340		16570		4770