what total amount of owners rsquo equity would be reported on the balance sheet 610666

Understanding Information in the Accounting Information System – Jacqueline owns and operates a specialty cosmetics manufacturing firm. Distribution is primarily through boutique shops in regional shopping centers, although some items are sold directly through a network of beauty consultants. Raw materials consist of various lotions, potions, fragrances, oils, and powders. The transactions that occurred during the month of March were entered into the accounting system as follows.

ASSETS

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=

LIABILITIES

+

OWNERS’ EQUITY

Date

Accounts

Cash

Other
Assets

Contributed
Capital

Retained
Earnings

Mar. 1

Cash

10,000

Contributed Capital

1,000

Mar. 3

Cash

7,000

Notes Payable

7000

Mar. 5

Merchandise Inventory

8,100

Cash

-8,100

Mar. 18

Cash

15,250

Sales Revenue

15,250

Cost of Goods Sold

-7,500

Merchandise Inventory

-7,500

Mar. 18

Wages Expense

-650

Cash

-650

Mar. 23

Notes Payable

-2,500

1,300

Cash

-2,500

Mar. 31

Retained Earnings

5,000

-2,000

Cash

-2,000

Ending Amounts

19,000

+600

=

4,500

+

10,000

+5,100

Required

A. Describe each of the firm’s transactions. Specify as much detail about each transaction as you can.

B. Assume an income statement and balance sheet are prepared immediately after the last transaction.

1. What amount of net income would be reported?

2. What total amount of owners’ equity would be reported on the balance sheet?

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