Question

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 $52,438 Accounts Payable $53,176 Accounts Receivable 34,819 Notes Payable 30,627 Inventory 80,386 Prepaid Rent 6,377 Paid-In Capital 227,278 Equipment 211,910 Retained Earnings 74,849 Total Assets $385,930 Total Equities $385,930 The following summary transactions occurred during July: Sold stock to investors for $42,000. Borrowed $26,000 from a bank and paid off a $13,000 bank loan. Bought $8,272 of merchandise from suppliers, paying $3,888 and promising to pay the rest in August. Bought equipment for $41,500 from a manufacturer, paying $4,700 and promising to pay the rest in September. Paid $2,755 to suppliers that it bought merchandise from in June. Sold merchandise, receiving $16,220 cash and promises from customers to pay $4,060; the merchandise that was sold cost $10,140 and was purchased earlier in July. Paid $594 for rent in advance. Received $2,375 from customers who purchased merchandise last month. Paid wages and other miscellaneous expenses totaling $5,730. Note: Ignore adjusting entries. 4. What was the cash balance on July 31? A: $95,899 B: $108,366 C: $122,454 D: $138,373 E: $156,361 F: $176,688 G: $199,657 H: $225,613 Tries 0/3 5. What were total equities on July 31? A: $483,769 B: $566,010 C: $662,231 D: $774,811 E: $906,529 F: $1,060,638 G: $1,240,947 H: $1,451,908 Tries 0/3 6. What was Net Income in July? A: $1,060 B: $1,409 C: $1,874 D: $2,493 E: $3,316 F: $4,410 G: $5,865 H: $7,801

Answer 1

4	Cash 52438+42000+26000-13000-3888-4700-2755+16220-594+2375-5730	108366
	Correct answer is B
5	Equity
	Accounts payable	91605	53176+8272-3888+41500-4700-2755
	Notes payable	43627	30627+26000-13000
	Paid in capital	269278	227278+42000
	Retained earnings	79259	74849+4410
	Total equities	483769
	Correct answer is A
6	Particulars	Amount
	Sales	20280	16220+4060
	Cost of goods sold	10140
	Gross profit	10140
	Wages and other misc expense	5730
	Net income	4410
	Correct answer is F