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.

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.

answer; schedule c;