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?