Question

Johnson Waterworks Corporation provides plumbing services. Transactions during the first year of operations are provided below.âa) Received $13,000 cash and issued common stock to Mitchell Johnson.âb) Paid $1,500 for equipment to be used for plumbing repairs.âc) Borrowed $10,000 from a local bank and deposited the money in the checking account.âd) Paid $400 in rent for the year.âe) Paid $300 for plumbing supplies to be used on various jobs next year.âf) Completed a plumbing repair for a law firm and received $3,400. Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of $400 are left at the end of the year.

Answer 1

Answer:

$ 26,100

Explanation:

Given:

Cash received = $13,000

Amount Paid for equipment to be used for plumbing repairs = $1,500

Amount borrowed = $10,000

Amount paid in rent for the year = $400

Amount paid for plumbing supplies = $300

Amount received for completing a plumbing repair = $3,400

Plumbing supplies left at the end of the year = $400

Now,

the total cash = Total Amount received -  Total Amount paid

or

The total cash = ($ 13000 + $ 10000 + $ 3400) - ($ 1500 + $ 400 + $ 300)

or

The total cash  = $ 24,200

Now

the assets from equipment = $ 1,500

Thus,

the total assets at end of the first year = The total cash + the assets from equipment  + Plumbing supplies left at the end of the year

or

The total assets at end of the first year = $ 24,200 + $ 1,500 + $ 400

or

The total assets at end of the first year = $ 26,100