a.
Cash Account | |||
1/2/18 Common Stock | 800,000 | 1/31/18 Rent expense | 20,000 |
1/8/18 Sales Revenue | 200,000 | 1/31/18 Accounts payable | 300,000 |
1/15/18 Sales Revenue | 200,000 | 1/31/18 Salaries expense | 50,000 |
1/31/18 Accounts receivable | 150,000 | 1/31/18 Ending Balance | 980,000 |
1,350,000 | 1,350,000 |
Cash balance as on January 31,2018 is $ 980,000
b.
Accounts receivable | |||
1/8/18 Sales revenue | 200,000 | 1/31/18 Cash | 150,000 |
1/31/18 Ending Balance | 50,000 | ||
200,000 | 200,000 |
Accounts receivable balance as on January 31,2018 is $50,000
c.
Accounts payable | |||
1/31/18 Cash | 300,000 | 1/4/18 Inventory | 400,000 |
1/31/18 Ending Balance | 100,000 | ||
400,000 | 400,000 |
Accounts payable balance as on Jan 31,2018 is $100,000
d.
Inventory | |||
1/4/18 Accounts payable | 400,000 | 1/8/18 Cost of goods sold | 250,000 |
1/15/18 Cost of goods sold | 140,000 | ||
1/31/18 Ending balance | 10,000 | ||
400,000 | 400,000 |
Cost of inventory still in the possession is $10,000
e.
Sales revenue | |||
1/8/18 Cash | 200,000 | ||
1/8/18 Accounts receivable | 200,000 | ||
1/15/18 Cash | 200,000 | ||
Total | 600,000 | Total | 600,000 |
Total Sales revenue is $600,000
f.
Cost of Goods sold | |||
1/8/18 Inventory | 250,000 | ||
1/15/18 Inventory | 140,000 | 1/31/18 Ending balance | 390,000 |
390,000 | 390,000 |
Cost of inventory sold is $390,000
g.
Total Expenses | |
Cost of goods sold | 390,000 |
Rent expense | 20,000 |
Salaries expense | 50,000 |
Total Expenses | 460,000 |
h.
Profit | |
Total Sales revenue | 600,000 |
Less: Expenses | |
Cost of goods sold | -390,000 |
Rent expense | -20,000 |
Salaries expense | -50,000 |
Profit | 140,000 |
i.
Balance in Stockholders' Equity as on Jan 31, 2018 | |
Common Stock | 800,000 |
Net profit | 140,000 |
Total Balance of Stockholders | 940,000 |
j.
ABC Company | |
Income statement | |
For the month ended January 31,2018 | |
Sales revenue | 600,000 |
Less: Cost of goods sold | -390,000 |
Gross profit (A) | 210,000 |
Expenses: | |
Rent expense | 20,000 |
Salaries expense | 50,000 |
Total Expenses (B) | 70,000 |
Net profit (A-B) | 140,000 |
k.
ABC Company | |||
Balance sheet | |||
For the month ended January 31,2018 | |||
Assets | Liabilities and Stockholders' Equity: | ||
Cash | 980,000 | Accounts payable | 100,000 |
Accounts receivable | 50,000 | ||
Inventory | 10,000 | Stockholder's Equity: | |
Common Stock | 800,000 | ||
Retained Earnings | 140,000 | ||
Total Stockholders' Equity | 940,000 | ||
Total Assets | 1,040,000 | Total Liabilities and stockholder's Equity | 1,040,000 |
Calculations:
Date | Account Titles and Explanation | Debit | Credit |
Jan.2 | Cash | 800,000 | |
Common stock | 800,000 | ||
[Sold common shares] | |||
Jan.4 | Inventory | 400,000 | |
Accounts payable | 400,000 | ||
[Purchase of inventory on account] | |||
Jan.8 | Cash | 200,000 | |
Accounts receivable | 200,000 | ||
Sales revenue | 400,000 | ||
[Sales on account and for cash] | |||
Cost of goods sold | 250,000 | ||
Inventory | 250,000 | ||
[Cost of sales] | |||
Jan.15 | Cash | 200,000 | |
Sales revenue | 200,000 | ||
[Sold for cash] | |||
Cost of goods sold | 140,000 | ||
Inventory | 140,000 | ||
[cost of sales] | |||
Jan.31 | Rent Expense | 20,000 | |
Cash | 20,000 | ||
[Rent expense paid] | |||
Jan.31 | Accounts payable | 300,000 | |
Cash | 300,000 | ||
[Paid to suppliers] | |||
Jan.31 | Salaries Expense | 50,000 | |
Cash | 50,000 | ||
[Paid salaries expense] | |||
Jan.31 | Cash | 150,000 | |
Accounts receivable | 150,000 | ||
[Cash received from customers] |
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