Reference no: EM132736660

X Company, a manufacturer, prepares monthly financial statements. On May 1, total equities were $116,583. The following transactions occurred during May:

1. Issued additional shares of stock for $118,000.
2. Acquired $8,200 of direct materials, 51% of of which was acquired on open accounts; the rest was paid in cash.
3. A one year rental agreement was signed for $6,900 per month. Rent for the first three months was paid in advance.
4. Product sales were $119,000; product costs were 66% of sales. 66% of the sales were on open account.
5. Wages and salaries amounted to $11,134, of which $10,321 was paid.
6. Paid $3,334 to suppliers for materials that X Company had previously purchased on account.
7. Collected $3,568 from customers who had previously purchased products from X Company on account.
8. Bought equipment for $82,500 with a down payment of $17,000 and a $65,500 loan from the bank.

Problem 1: What would total equities be on May 31? (Ignore adjusting entries.)

A: $169,508

B: $211,885

C: $264,856

D: $331,070

E: $413,838

F: $517,297

Problem 2: What would Net Income be for May? (Ignore adjusting entries.)

A: $9,372

B: $12,465

C: $16,579

D: $22,050

E: $29,326

F: $39,004