Question - Record transactions and calculate financial statement amounts
The transactions relating to the formation of Blue Co. Stores, Inc., and its first month of operations follow.
a. The firm was organized and the stockholders invested cash of $8,600.
b. The firm borrowed $5,200 from the bank; a short-term note was signed.
c. Display cases and other store equipment costing $1,700 were purchased for cash. The original list price of the equipment was $1,930, but a discount was received because the seller was having a sale.
d. A store location was rented, and $1,200 was paid for the first month's rent.
e. Inventory of $14,300 was purchased; $8,800 cash was paid to the suppliers, and the balance will be paid within 30 days.
f. During the first week of operations, merchandise that had cost $4,800 was sold for $5,200 cash.
g. A newspaper ad costing $130 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month.
h. Additional inventory costing $4,350 was purchased; cash of $1,100 was paid, and the balance is due in 30 days.
i. In the last three weeks of the first month, sales totaled $13,250, of which $9,400 was sold on account. The cost of the goods sold totaled $8,200.
j. Employee wages for the month totaled $2,000; these will be paid during the first week of the next month.
k. The firm collected a total of $3,300 from the sales on account recorded in transaction i.
l. The firm paid a total of $4,150 of the amount owed to suppliers from transaction e.
Required:
a. Record each transaction in the appropriate columns.
b. Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.