X Company is a merchandiser and prepares monthly financial statements. The follo

Question

X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of January: Balance Sheet January 1 Equities Assets Cash Accounts Receivable $53,537 Accounts Payable 30,409 Wages Payable 75,776 Notes Payable 5,634 Pald-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. S. 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, utilties, and other miscellaneous expenses. Note: Ignore adjusting entries. 4. What was the cash balance on January 31? $91,554 You are correct. Your receipt no. is 152-5217 Previous Tries 5. What were total equities on January 31? 42376:3 Tries 1/3 Previous Tries SubmR Answer 6. What was net income in January? 29045 Submt Answer Incorrect. Tries 1/3 Previous Tries

Explanation / Answer

Solution:-

4. Cash balance on january 31:-

$91,554

Explanation:- 53,537 + 43,000 + 28,000 - 3,078 - 39,400 - 3,464 + 15,847 - 570 + 3,102 - 5,420 = $ 91,554.

5. What were total equities on january 31:-

$471,403

Explanation:

389,270 + 43,000 + 28,000 + 5,457 + 4,500 - 3,464 + 4,640 = $ 471,403

6. What was net income in January:-

$4,640

Explanation:- (15,847 + 4,273 - 10,060) - 5,420 = $ 4,640.

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