ABC Clothing had opened on January 1, 2022. The following activities have occurred since the opening day: • on January 1st, the company received $40,000 of equity from investors • on January 1st, the company took out a loan for $30,000 at 10% annual interest rate • on January 17th, 2022, the company had purchased 7000 baseball caps from the manufacturer at $5 each. • as of March 31, 2022, a total of 4000 of the baseball hats were sold, the only product offered by the company, for total of $36,000. Additional expenses: • Rent $3,000/month was prepaid for all of 2022 • Salaries: $2,000 a month a) What is the companies net profit for the 1st quarter of 2022? b) create a simple balance sheet statement for the company as March 31, 2022.
ABC Clothing had opened on January 1, 2022. The following activities have occurred since the opening day: • on January 1st, the company received $40,000 of equity from investors • on January 1st, the company took out a loan for $30,000 at 10% annual interest rate • on January 17th, 2022, the company had purchased 7000 baseball caps from the manufacturer at $5 each. • as of March 31, 2022, a total of 4000 of the baseball hats were sold, the only product offered by the company, for total of $36,000. Additional expenses: • Rent $3,000/month was prepaid for all of 2022 • Salaries: $2,000 a month a) What is the companies net profit for the 1st quarter of 2022? b) create a simple balance sheet statement for the company as March 31, 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC Clothing had opened on January 1, 2022.
The following activities have occurred since the opening day:
• on January 1st, the company received $40,000 of equity from investors
• on January 1st, the company took out a loan for $30,000 at 10% annual
interest rate
• on January 17th, 2022, the company had purchased 7000 baseball caps from
the manufacturer at $5 each.
• as of March 31, 2022, a total of 4000 of the baseball hats were sold, the only
product offered by the company, for total of $36,000.
Additional expenses:
• Rent $3,000/month was prepaid for all of 2022
• Salaries: $2,000 a month
a) What is the companies net profit for the 1st quarter of 2022?
b) create a simple balance sheet statement for the company as March 31, 2022.
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