Questions 4, 5, and 6 refer to the following information X Company is a merchand

Question

Questions 4, 5, and 6 refer to the following information X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of January: Balance Sheet January Equities Assets Cash Accounts Receivable 30,654 Inventory Prepaid Payable $53,544 Wages $53,205 Accounts 1,096 76,570 Payable 33,526 Paid-In227,630 Capital Earnings Equities $390,653 Rent Equipment 223,876 Retained 74,857 Assets $390,653 Total The following summary transactions occurred during January 1. Sold stock to investors for $46,000 2. Borrowed $20,000 from a bank 3. Bought merchandise from suppliers, paying $3,006 and 4. Bought equipment from a manufacturer, paying 5. Paid $3,943 to merchandise suppliers that it had 6. Sold merchandise, receiving $15,542 cash and promising to pay $5,040 next month $38,800 and promising to pay $4,600 in three months promised to pay promises to pay of $4,698; the merchandise that was sold previously cost $10,120 7. Paid a total of $547 for rent and insurance in advance

Explanation / Answer

Required questions are as answered below:

4. Cash Balance on Jan 31 is $85,193

5. Total equities on january 31 is $ 352,070

6. Net Income in January is $3,583

Cash Particulars Amount Particulars Amount Opening 53,205 3 3,006 1 46,000 4 38,800 2 20,000 5 3,943 6 15,542 7 547 8 2,732 9 5,990 137,479 52,286 Jan-31 85,193

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