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

Question

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

1) Received $87,000 from a group of investors and received a $92,000 loan from the bank.

2) Bought $8,951 of merchandise, $3,009 for cash and $5,942 on account.

3) Bought equipment costing $10,000, paying the manufacturer $5,500 in cash and promising to pay the remaining $4,500 next month.

4) Sold merchandise for $22,360, of which $17,702 was for cash and $4,658 was on account; cost of the merchandise was $11,180.

5) Paid $3,904 to suppliers for merchandise previously bought on account.

6) Collected $2,839 from customers on account.

7) Paid wages of $5,500.

8) Paid a total of $523 for rent and insurance in advance.

9) Recorded depreciation of $1,650.

10) Recorded a total of $108 for rent and insurance that had expired.

What were total equities on September 30? _________________

Explanation / Answer

X Company All Amounts in $ Estimated Balance Sheet as on 30 September Assets Cash 181105 Accounts Receivable 1819 Inventory Valuation -2229 Prepaid Rent and Insurance 415 Equipment (Net of Depreciation) 8350 Total Assets 189460 Liabilities Accounts Payable 6538 Bank Loan 92000 Investor Funds (Common Stock) 87000 Retained Earnings 3922 Total Liabilities 189460 From the above Balance Sheet, Equities as on September 30 work out to 90922 $

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