Problem -
A. Record the following journal entries for Clark Company:
1. Investors provided cash of $90,000 for stock.
2. Equipment of $100,000 was purchased with 20% paid in cash and the balance on a 6 percent note payable.
3. The company purchased $40,000 of inventory on account.
4. The company had sales on account of $50,000. The cost of the inventory sold was $30,000.
5. Wages of $10,000 were paid.
6. Cash sales were $20,000. The cost of the inventory sold was $12,000.
7. A utility bill of $1,500 was received.
8. The company collected $38,000 of sales on account.
9. The company paid $36,000 of previous inventory purchases on account.
10. Depreciation on equipment was $3,000.
11. One month ago, Clark Company purchased six months of insurance for $3,600, record the entry to recognize the amount of insurance used.
12. Record the interest expense on the note for one month.
B. Determine the ending balance in cash.
C. Determine the amount of net income before tax for the company.