Question

X Company started business on June 1 and prepares monthly financial statements. The following were June transactions:

received $45,000 from a group of investors

bought $8,413 of merchandise, $3,920 for cash and $4,493 on account

sales were $42,400, of which $38,115 were for cash and $4,285 were on account; Cost of Goods Sold was $23,744

paid $3,785 to suppliers for merchandise previously bought on account

collected $2,571 from customers on account

paid expenses totalling $8,222

4. What were total assets on June 30? 5. What was Net Income in June?

Answer 1

5.

Sales	$         42,400
Less : Cost of Goods Sold	$         23,744
Gross Profit	$         18,656
Expenses	$            8,222
Net Income	$         10,434

4. Total Assets = Total Liabilities + Total Equity = $56142

Accounts Payable	$               708
Equity	$         55,434
	$         56,142

Note : There is some error in question, i.e. Total inventory purchased is $8413, but cost of goods sold is $23744 which is not possible. Therefore part 4 has been solved indirectly. If any change in question, kindly comment.