Reference no: EM131773748

Problem - X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of January:

Balance Sheet January 1

Assets  Equities

Cash $50,229     Accounts Payable $50,481   

Accounts Receivable 33,196    Wages Payable 1,310   

Inventory 81,449     Notes Payable 34,674   

Prepaid Rent 5,870     Paid-In Capital 244,659   

Equipment 229,034     Retained Earnings 68,654   

Total Assets $399,778     Total Equities $399,778   

The following summary transactions occurred during January:

1. Sold stock to investors for $41,000.

2. Borrowed $27,000 from a bank.

3. Bought merchandise from suppliers, paying $3,795 and promising to pay $4,723 next month.

4. Bought equipment from a manufacturer, paying $31,700 and promising to pay $5,000 in three months.

5. Paid $3,421 to merchandise suppliers that it had promised to pay.

6. Sold merchandise, receiving $17,811 cash and promises to pay of $4,109; the merchandise that was sold previously cost $10,960.

7. Paid a total of $556 for rent and insurance in advance.

8. Received $2,230 from customers who had promised to pay.

9. Paid $5,400 for wages, utilties, and other miscellaneous expenses.

What was net income in January?