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20 June, 16:56

The business was started when Nimmo Corp.

1. received $390,000 from the issue of common stock.

2. Purchased $1,140,000 of merchandise on account.

3. Sold merchandise for $1,440,000 cash (not including sales tax).

4. Sales tax of is collected when the merchandise is sold.

5. The merchandise had a cost of $870,000 Good idea to split this into two accounting entries - think.

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  1. 20 June, 20:49
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    Income:

    sales revenue 1,440,000

    COGS 870,000

    Income 570,000

    Balance Sheet:

    Cash 1,873,200.00

    Inventory 270,000.00

    Total Assets 2,143,200.00

    Liabilities:

    Accounts payable 1,140,000.00

    Sales tax payable 43,200.00

    Total Liab 1,183,200.00

    Equity:

    Common Stock 390,000

    RE 570,000

    Total 960,000

    Total Liab + Equity 2,143,200.00

    Cash flow

    from operating activities

    from sale 1,483,200

    from financing

    issuance of common stock 390,000

    Total cash 1,873,200.00

    Q: prepare financial statement

    Explanation:

    First we do the net income

    which is the sales revenue less the COGS

    the sales tax is not revenue We are witholding in favor of the gevernment.

    Then, we do the cash flow statement.

    Last, the balance sheet.

    inventory will be the purhcase less the used in the sale

    the net income will be posted under retained earnings

    the cash balance should bethe one calcualted on the cash flwo statement.
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