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 $93,000 from a group of investors and received a $80,000 loan from the bank.

2. Bought $8,913 of merchandise, $3,011 for cash and $5,902 on account.

3. Bought equipment costing $9,700, paying the manufacturer $5,700 in cash and promising to pay the remaining $4,000 next month.

4. Sold merchandise for $20,890, of which $15,997 was for cash and $4,893 was on account; cost of the merchandise was $10,445.

5. Paid $3,188 to suppliers for merchandise previously bought on account.

6. Collected $2,897 from customers on account.

7. Paid wages of $5,560.

8. Paid a total of $592 for rent and insurance in advance.

9. Recorded depreciation of $1,700.

10. Recorded a total of $122 for rent and insurance that had expired.

Question 1. What were total equities on September 30?

Explanation / Answer

X Company All Amounts in $ Balance Sheet as on September 30 Assets Cash in Hand 173843 Accounts Receivable 1996 Excess Sales over Inventory -1532 Prepaid Rent & Insurance 470 Fixed Assets 8000 (Net of Depreciation) Total Assets 182777 Liabilities Accounts Payable 6714 Loan from Bank 80000 Total Equities Equity from Investors 93000 Retained Earnings 3063 96063 Total Assets 182777

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