Answer:
a. Record
1.
Cash $12,500 (debit)
Capital $12,500 (credit)
2.
Inventories $6,250 (debit)
Accounts Payable $6,250 (credit)
3.
Operating expenses $5,500 (debit)
Cash $5,500 (credit)
4.
Accounts Receivables $7,440 (debit)
Revenue $7,440 (credit)
5.
Cash $4,700 (debit)
Revenue $4,700 (credit)
6.
Cash $3,100 (debit)
Accounts Receivables $3,100 (credit)
7.
Capital $1,500 (debit)
Cash $1,500 (credit)
b. Trial Balance
Debit Credit
Cash ($12,500-$5,500-$1,500+$3,100+$4,700) $11,500
Capital ($12,500-$1,500) $11,000
Inventories $6,250
Accounts Payable $6,250
Operating expenses $5,500
Accounts Receivables ($7,440 - $3,100 ) $4,340
Revenue ($7,440+$4,700) $12,140
c. (1) Net Income = $5,140
c. (2) Stockholders' equity = $16,140
Explanation:
c. (1) Net Income
Income = Revenue - Expenses
= $12,140 - $5,500 - $1,500
= $5,140
c. (2) Stockholders' equity
Stockholders' equity = Capital + Income
= $11,000 + $5,140
= $16,140
