I need help with the fifth problem. X Company was created on September 1 and pre

ID: 2484788 • Letter: I

Question

I need help with the fifth problem.

X Company was created on September 1 and prepares monthly financial statements. During September, the company had the following transactions: 1. Received $99,000 from a group of investors and received a $91,000 loan from the bank. 2. Bought $8,710 of merchandise, $3,054 for cash and $5,656 on account. 3. Bought equipment costing $10,900, paying the manufacturer $5,900 in cash and promising to pay the remaining $5,000 next month. 4. Sold merchandise for $22,150, of which $17,467 was for cash and $4,683 was on account; cost of the merchandise was $11,075. 5. Paid $3,410 to suppliers for merchandise previously bought on account. 6. Collected $2,869 from customers on account. 7. Paid wages of $5,250. 8. Paid a total of $519 for rent and insurance in advance. 9. Recorded depreciation of $1,850. 10. Recorded a total of $117 for rent and insurance that had expired. 5. What were total equities on September 30? 6. What was Net Income in September? $3,858

Explanation / Answer

Calculation of Net income in September:

Sales Revenue

$ 22,150

Less: Cost of Merchandise sold

$ (11,075)

Less: Wages expenses

$ (5,250)

Less: Depreciation

$ (1,850)

Less: Rent and insurance expired

$ (117)

Net income

$ 3,858

Calculation of Total Equities as on September 30:

Received from investors

$ 99,000

Add: Net income

$ 3,858

Total Equities as on September 30

$ 102,858