Calculate sales, CGS, net income, cash, assets, liabilities
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Rhaman Company had the following transactions during its first month of operations.
The owner invested $10,200 cash in the business, plus some office furniture and equipment that had originally cost $3,000 but was currently worth only $1,500.
Additional equipment costing $4,000 was purchased for cash.
Inventory costing $3,300 was acquired on account.
Supplies costing $550 were purchased for cash.
The entire inventory was sold to customers for $5,800. The company received half of this amount in cash this month and will receive the remainder next month.
All the supplies were used up during the month.
The equipment was amortized at $100 for the month.
Operating expenses paid in cash during the month were $800.
No dividends were declared during the month.
Required
Calculate the following amounts as at the end of the month:
a. Sales revenue
b. Cost of goods sold
c. Total expenses other than cost of goods sold
d. Net income or loss
e. Cash
f. Total assets other than cash
g. Liabilities
h. Share capital (or common shares)
i. Retained earnings
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Solution Summary
The solution expains how to calculate the required variables given the transactions.
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a. Sales revenue
All inventory was sold for $5,800 and so the sales revenue is $5,800
b. Cost of goods sold
The cost of goods sold is the inventory value which is $3,300
c. Total expenses other than cost of goods sold
Other expenses are
Supplies used up ...
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