Problem 4: Revenue and Expense Recognition

During September 2018, Alexander Company under- took the following transactions on the dates specified:

Sept. 1Paid $400 for insurance for the next four months.

Sept. 1Borrowed $6,000 from the local bank at an annual rate of 4%. The loan and interest will be repaid in one year (on Sept. 1, 2020).

Sept. 1Purchased equipment for $15,000 cash. The estimated useful life of the equipment is 10 years.

Sept. 2Purchased inventory from suppliers for $8,500 on account.

Sept. 2Paid employees $3,200 for their August salaries.

Sept. 5Sold goods to customers for $7,600 on account. The cost of the goods to Alexander was $4,400.

Sept. 8Received an order from a customer for $350 of goods that will be delivered in October.

Sept. 15Paid suppliers $8,500 cash for goods purchased on the 2nd.

Sept. 26 Collected $5,800 from customers for goods sold on the 5th.

Sept. 26Sold goods to customers for $1,000 cash. The cost of the goods to Alexander was $550.

Sept. 29Collected $670 cash from a customer for goods that will be delivered in October.

Sept. 30Employees earned $3,240 during September, which Alexander will pay in October.

Required:

simple income statement for the month of September 2019.