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

ID: 2484146 • Letter: X

Question

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

Received $81,000 from a group of investors and received a $81,000 loan from the bank.

Bought $8,449 of merchandise, $3,807 for cash and $4,642 on account.

Bought equipment costing $9,400, paying the manufacturer $5,400 in cash and promising to pay the remaining $4,000 next month.

Sold merchandise for $21,760, of which $17,623 was for cash and $4,137 was on account; cost of the merchandise was $10,880.

Paid $3,638 to suppliers for merchandise previously bought on account.

Collected $2,721 from customers on account.

Paid wages of $5,100.

Paid a total of $590 for rent and insurance in advance.

Recorded depreciation of $2,000.

Recorded a total of $124 for rent and insurance that had expired.

5. What were total equities on September 30?

6. What was Net Income in September? $3,656

Total equity on Sept 30 is $81000.

Net Income in Sept:

Sale of merchandise 21760 (-)Cost of merchandise 10880 (-) Wages 5100 (-) Rent and insurance 124 (-)Depreciation 2000 Net Income 3656

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