The Smith Corp. began business this year and entered into the following transactions during the year. The company issued common stock in exchange for cash of $80,000 from stockholders, borrowed $40,000 from a bank, bought $12,000 of inventory on account, and purchased $32,000 of equipment by paying $12,000 in cash and issuing a note for the remainder. What is the amount of total assets to be reported on the balance sheet at the end of the year?

A) $104,000B) $120,000C) $128,000D) $152,000

Question

Anika

Business

4 November, 10:38

The Smith Corp. began business this year and entered into the following transactions during the year. The company issued common stock in exchange for cash of $80,000 from stockholders, borrowed $40,000 from a bank, bought $12,000 of inventory on account, and purchased $32,000 of equipment by paying $12,000 in cash and issuing a note for the remainder. What is the amount of total assets to be reported on the balance sheet at the end of the year?

A) $104,000B) $120,000C) $128,000D) $152,000

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Answers (1)

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Charlie Dickson · Answer 1

The answer is: D) $152,000

Explanation:

To calculate the total amount of assets to be reported we must:

Increase Cash by $80,000 - by issuing common stock

Increase Cash by $40,000 - bank credit

Increase Inventory by $12,000 - purchased inventory

Increase Equipment by $32,000 - purchased equipment

Decrease Cash by ($12,000) - Cash paid for equipment

Total assets to be reported $152,000