X Company was created on September 1 and prepares monthly financial statements.
ID: 2484470 • 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? SHOW ALL WORK! LAST ATTEMPT FOR NUMBER 5!
Explanation / Answer
1. Net Income in September $ Sale of Merchandise 20,580 Less:- Expenses Cost of Merchandise 10,290 Wages 5,770 Depreciation 1,500 Rent & Insurance 100 Total Expenses 17,660 Net Income 2,920 2. Total Equities as on 30th September $ Received from Group companies 93,000 Net Proft for Sept 2,920 Total Equities as on 30th Sept 95,920
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