Question

Questions 4, 5, and 6 refer to the following balance sheet and transactions:

web> X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July:

Balance Sheet

July 1

Assets		Equities
Cash	$52,340	Accounts Payable	$63,268
Accounts Receivable	34,362	Notes Payable	31,309
Inventory	75,228
Prepaid Rent	5,467	Paid-In Capital	234,140
Equipment	223,352	Retained Earnings	62,032
Total Assets	$390,749	Total Equities	$390,749

The following summary transactions occurred during July:

1. Sold stock to investors for $49,000.
2. Borrowed $20,000 from a bank and paid off a $14,000 bank loan.
3. Bought $8,548 of merchandise from suppliers, paying $3,287 and promising to pay the rest in August.
4. Bought equipment for $44,100 from a manufacturer, paying $4,900 and promising to pay the rest in September.
5. Paid $3,382 to suppliers that it bought merchandise from in June.
6. Sold merchandise, receiving $16,169 cash and promises from customers to pay $4,301; the merchandise that was sold cost $10,235 and was purchased earlier in July.
7. Paid $572 for rent in advance.
8. Received $2,547 from customers who purchased merchandise last month.
9. Paid wages and other miscellaneous expenses totaling $5,990.

Note: Ignore adjusting entries. 4. What was the cash balance on July 31?

A: $49,226

B: $57,594

C: $67,385

D: $78,841

E: $92,244

F: $107,925

G: $126,272

H: $147,739

Tries 0/3

5. What were total equities on July 31?

A: $277,615

B: $369,228

C: $491,073

D: $653,127

E: $868,659

F: $1,155,317

G: $1,536,571

H: $2,043,639

Tries 0/3

6. What was Net Income in July?

A: $662

B: $960

C: $1,392

D: $2,019

E: $2,928

F: $4,245

G: $6,155

H: $8,925

Answer 1

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and formulas and format. For detailed answers refer to the supporting sheets.

Answer 2 Part 4 3 The correct answer is F) $107925 4 Particulars Opening cash balance Common stock issued Money Borrowed Money repaid Payment to supplier Payment to manufacturer Payment to supplier Received money from customer Paid advance rent Received money from customer Paid wages Closing cash balance on iulv 31 Amount 52340 49000 20000 14000 3287 -4900 3382 16169 572 2547 5990 107925 9 10 12 13 14 15 16 17 18

9 0 Part 5 1 The correct answer is C) $491073 Particulars Account Payable (63268+5261+39200-3382) Notes Payable (31309+30000-14000) Paid in capital (234140+49000) Retained earnings (62032+16169+4301-10235-5990) Total closing equity on july 31 Amount 104347 37309 283140 9 0 66277 491073 5 Part 6 6 The correct answer is F) $4245 Net Income Revenue- cost of goods sold- expenses (16169+4301)-10235-5990 9 0 $4245