Following Is the Balance Sheet for Value Creation, Inc $\quad$

question 65

Essay

Following is the balance sheet for Value Creation, Inc. as of January 31, 20X9:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Value Creation, Inc. }$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Balance Sheet }$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { January 31, 20X9 }$

\begin{array}{l}\begin{array}{lll}\text { Assets: }\\\text { Cash } & \$ 7,100 \\\text { Accounts Receivable } & 4,000 \\\text { Merchandise Inventory } & 13,500 \\\text { Prepaid Rent } & 3,300 \\\text { Store Equipment } & \underline{15,600} \\\\\\\text { Total Assets }& \underline{\$43,500} \\end{array}\begin{array}{lll}\text { Liabilities: }\\\text { Accounts Payable }&\$ 6,200 \\\text { Notes Payable }&\underline{8,300} \\\text { Total Liabilities }&14,500\\\text { Stockholders' Equity: }\\\text { Paid-in Capital } & \$ 17,600 \\\text { Retained Earnings } & \underline{11,400} \\\text { Total Stockholders' equity } & \underline{29,000} \\\text { Total Liab. and Stockholders' Equity } & \underline{\$ 43,500} \\\end{array}\end{array}
The following transactions occurred during January:
1.The company paid $2,100 of the accounts payable.
2.The company acquired $3,500 of merchandise inventory,paying 40% in cash and the remainder on open account.
3.The utility bill of $1,400 for the month of January was paid.
4.The company received $2,200 from its credit customers.
5.Sales of merchandise inventory for the month of January totaled $22,500,of which $10,000 was paid in cash and the remaining amount was on open account.The cost of the merchandise sold was $15,000.
6.The company paid $1,600 of the note payable.Ignore interest expense.
7.Depreciation on the store equipment was $900 for the month.
8.Additional store equipment of $1,700 was acquired.Of this amount,$700 was paid in cash and the remainder was added to the note payable balance.
9.The balance in the prepaid rent account represented 3 months' worth of rent paid in advance as of January 31,20X9.
Required:
Prepare an income statement for the month ended January 31,20X9.

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