Question

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

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]?

Homework Answers

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
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