X Company was created on September 1 and prepares monthly financial statements.
ID: 2484389 • 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 $81,000 loan from the bank. Bought $8,976 of merchandise, $3,869 for cash and $5,107 on account. Bought equipment costing $9,600, paying the manufacturer $5,000 in cash and promising to pay the remaining $4,600 next month. Sold merchandise for $20,580, of which $16,407 was for cash and $4,173 was on account; cost of the merchandise was $10,290. Paid $3,927 to suppliers for merchandise previously bought on account. Collected $2,751 from customers on account. Paid wages of $5,770. Paid a total of $538 for rent and insurance in advance. Recorded depreciation of $1,500. Recorded a total of $100 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 ans ) the amount received from investors in September will be the total equity of $93,000
6 ans ) the net income of September is calculated by first
First ascertain the revenue generated in September
Calculate the expenses related to the month of September
Net income will be Revenue – expenses
Let us calculate the revenue for the September
Sold merchandise for $20,580,
The expenses related to September
Bought $8,976 of merchandise
Paid wages of $5,770.
Recorded depreciation of $1,500.
Recorded a total of $100 for rent and insurance that had expired.
The total expenses of September are = $8976 + $5770 + $1500 + $100 = $16346
The net income = $ 20,580 - $16,346
The net income = $4,234
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