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e firm was organized and the stockholders invested cash of $7,000.

The firm borrowed $5,700 from the bank; a short-term note was signed.

Display cases and other store equipment costing $1,600 were purchased for cash. The original list price of the equipment was $1,930, but a discount was received because the seller was having a sale.

A store location was rented, and $1,400 was paid for the first month's rent.

Inventory of $14,900 was purchased; $8,400 cash was paid to the suppliers, and the balance will be paid within 45 days.

During the first week of operations, merchandise that had cost $4,500 was sold for $6,000 cash.

A newspaper ad costing $140 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month.

Additional inventory costing $4,050 was purchased; cash of $1,350 was paid, and the balance is due in 30 days.

In the last three weeks of the first month, sales totaled $13,000, of which $9,400 was sold on account. The cost of the goods sold totaled $8,400.

Employee wages for the month totaled $1,800; these will be paid during the first week of the next month.

The firm collected a total of $3,650 from the sales on account recorded in transaction i.

The firm paid a total of $4,950 of the amount owed to suppliers from transaction e.

Required:

a. Record each transaction in the appropriate columns. Enter decreases to account balances as a negative.

ASSETS = LIABILITIES + STOCKHOLDERS' EQUITY Transaction Accounts Merchandise Notes Accounts Paid-in Retained Cash + Receivable + Inventory + Equipment = Payable + Payable + Capital + Earnings + Revenue Expenses a. + + + = + + + + b. + + + = + + + + c. + + + = + + + + d. + + + = + + + + e. + + + = + + + + f. + + + = + + + + g. + + + = + + + + h. + + + = + + + + i. + + + = + + + + j. + + + = + + + + k. + + + = + + + + l. + + + = + + + + + + + = + + + +

+

b. Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.

c. After completing parts a through l, prepare an income statement for Blue Co. Stores, Inc., for the month presented and a balance sheet at the end of the month.

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