Questions4, S, and 6 refer to the following information X Company is a merchandi
ID: 2599210 • Letter: Q
Question
Questions4, S, 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 anuary Equities Assets Cash Accounts Rece vable 53,537 Accounts Payable 30,409 Wages Payable 75,776 Notes Payable 5,634 Paid-In Capital 223,914 Retained Earnings $60,706 1,114 30,514 226,282 70,654 $389,270 Prepaid Rent Equipment Total Assets $389,270 Total Equities The following summary transactions occurred during January: 1. Sold stock to investors for $43,000. 2. Borrowed $28,000 from a bank. 3. Bought merchandise from suppliers, paying $3,078 and promising to pay $5,457 next month. 4. Bought equipment from a manufacturer, paying $39,400 and promising to pay $4,500 in three months. 5. Paid $3,464 to merchandise suppliers that it had promised to pay. 6. Sold merchandise, receiving $15,847 cash and promises to pay of $4,273; the merchandise that was sold previously cost $10,060. 7. Paid a total of $570 for rent and insurance in advance. 8. Received $3,102 from customers who had promised to pay 9. Paid $5,420 for wages, utlties, and other miscellaneous expenses. Note: Ignore adjusting entries. 4. What was the cash balance on January 31? Submt Anewer Tries 0/3 5. What were total equities on January 31? Suomt Answer Tries 0p3 6. What was net income in January? Submit Answer Tries 0/3Explanation / Answer
CALCULATION OF CASH BALANCE AS ON 31ST JANUARY:
Opening balance of Cash
53,537
Stock Sold
43,000
Borrowings
28,000
Merchandise bought
(3,078)
Equipment bought
(39,400)
Payment to merchandise supplier
(3,464)
Merchandise sold
15,847
Rent and Insurance Payment
(570)
Received from customer
3,102
Payment for wages
(5420)
Cash Balance as on 31st January
91,554
CALCULATION OF TOTAL EQUITIES AS ON 31ST JAN.
Total equities as on 01, January
3,89,270
Borrowings
28,000
Account payable- Merchandise Bought
5,457
Account Payable- Equipment Purchases
4,500
Less: payment to merchandise supplier
(3,464)
Total Equities as on 31, January
4,23,763
CALCULATION OF NET INCOME IN JANUARY:
Sales
43,000
Less: Purchases of Merchandise
(8,535)
Less: Wages, Utilities & Misc Exp.
(5,420)
Net Income
29,045
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Opening balance of Cash
53,537
Stock Sold
43,000
Borrowings
28,000
Merchandise bought
(3,078)
Equipment bought
(39,400)
Payment to merchandise supplier
(3,464)
Merchandise sold
15,847
Rent and Insurance Payment
(570)
Received from customer
3,102
Payment for wages
(5420)
Cash Balance as on 31st January
91,554
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