Reference no: EM131774850

Problem - Mike Bean opens a garden supply shop. During September, the first month of operation, he experienced the following events:

09/01 Owner contributes $7,500 in cash to capitalize the business

09/08 Purchased $2,500 in garden equipment/supplies on account, payable in 30 days.

09/15 Paid first month's shop rent of $1,000.

09/17 Sold garden equipment that cost $800 for $1,100; collected $400 cash; billed customers for the balance.

09/25 Collected $425 from customers on accounts.

09/28 Paid $500 to suppliers for parts purchased earlier this month.

Requirements:

1. Prepare journal entries for the preceding transactions.

2. Prepare income statement for the month ended 09/30/XX

3. Prepare the balance sheet for 09/30/XX.