Shelly Wagner Began a Sole Proprietorship Named Wagner Company on June

question 113

Essay

Shelly Wagner began a sole proprietorship named Wagner Company on June 1,20X9.Following are the transactions,which occurred during the first 10 days of June,20X9.
June 1 Shelly invested $\$ 6,600$ cash in Wagner Company
June 2 Wagner Company acquired equipment costing $\$ 3,900$ . One-third of the balance was paid in cash with the balance as a note.
June 4 Wagner Company acquired inventory costing $\$ 2,200$ , half of which was paid in cash.
June 5 Wagner Company acquired $\$ 200$ in supplies on open account.
June 7 Shelly's daughter, Sydney, purchased $\$ 600$ of equipment, at cost and on open account from
Wagner Company
Iune $9 \quad$ Wagner Company returned $\$ 100$ of defective inventory and received a full credit.
June 10 Wagner Company received $\$ 200$ from Sydney, Shelly's daughter, in partial settlement of her Required:
1.Prepare an analysis of the transactions on the balance sheet equation.
2.Prepare a balance sheet for Wagner Company as of June 10,20X9.

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Definitions:

Total Current Liabilities

These are obligations that a company is required to pay within one year or within the normal operating cycle.

Working Capital

The variance between a business's immediate assets and its short-term obligations, signalling its ability to meet short-term debts.

Current Ratio

A financial liquidity ratio that compares a company's current assets to its current liabilities.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects on its credit sales by comparing net credit sales with the average accounts receivable over a period.