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

ID: 2483697 • Letter: X

Question

X Company was created on September 1 and prepares monthly financial statements. During September, the company had the following transactions:

Received $93,000 from a group of investors and received a $97,000 loan from the bank.

Bought $8,540 of merchandise, $3,069 for cash and $5,471 on account.

Bought equipment costing $10,600, paying the manufacturer $5,600 in cash and promising to pay the remaining $5,000 next month.

Sold merchandise for $21,960, of which $17,808 was for cash and $4,152 was on account; cost of the merchandise was $10,980.

Paid $3,267 to suppliers for merchandise previously bought on account.

Collected $2,871 from customers on account.

Paid wages of $5,720.

Paid a total of $537 for rent and insurance in advance.

Recorded depreciation of $1,800.

Recorded a total of $114 for rent and insurance that had expired.

5. What were total equities on September 30?

6. What was Net Income in September?

Explanation / Answer

5 total equities on september 30 is $93000+5786 = .$98786

6.

Income statement

sale 21960

purchase -8540

wages -5720

rent -114

depriciation -1800

net income 5786