The Glavits Company opened for business on Monday, June 1, with inventory of $5,000 and cash in

Question:

The Glavits Company opened for business on Monday, June 1, with inventory of $5,000 and cash in the bank of $7,000. These were its only assets. All start-up financing was provided from the owner’s personal funds, and there were no other liabilities. The firm has a at the bank that enables it to borrow up to $20,000 by writing overdraft checks on its account.
Glavits’s terms of sale are net 30, but the new firm must pay its suppliers in 10 days. Employees are the company’s only expense. They’re paid a total of $1,000 per week each Friday afternoon for the week just ending.
On June 3, the company made a sale of $9,000 out of inventory with a cost of $3,000. On June 10, it received $2,000 of new inventory. There were no other sales or inventory receipts. The company bought a delivery truck, paying with a $6,000 check on June 30. The books were closed for the month on Tuesday, June 30. Construct Glavits’s income statement and for June using the worksheet shown. Ignore taxes for this problem. First, enter the beginning Next, enter one number two times in each column to reflect the transaction indicated at the top of the column. Note that sometimes the numbers will be additions and sometimes they will be subtractions. Finally, add across the page to get the statements for June.
Worksheet Rows ..........Worksheet Columns
1. ......1. Opening Assets ...............2. Record sales
3. Cash .............3. Record cost of sale
4. .........4. Receive inventory
5. Inventory ............5. Pay for inventory
6. Fixed assets (net) .............6. Buy truck
7. Total assets ......7. Pay employees—first 4 weeks
8. (skip) ..........8. Pay employees—last 2 days
9. Liabilities .......9. Reclassify cash overdraft as loan
10. .............10. Record net income as income
11. Accruals ................and equity
12. Debt ..................11. (Skip)
13. Equity ..............12. June statements
14. Total liabilities & equity
15. (skip)
16. INCOME STATEMENT
17. Sales
18. Cost
19. Expense
20. Net income

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...