Question

A company was formed with $60,400 cash contributed by its owners in exchange for common stock. The company borrowed $30,400 from a bank. The company purchased $10,400 of inventory and paid cash for it. The company also purchased $70,400 of equipment by paying $10,000 in cash and issuing a note for the remainder. What is the amount of the total assets to be reported on the balance sheet?

Answer 1

Answer:

The amount of the total assets to be reported on the balance sheet is $151,200

Explanation:

The total assets comprise of current assets, fixed assets ,and the intangible assets

The current assets include cash, stock, account receivable, etc

Fixed assets include plant & machinery, land, equipment, furniture & fittings, etc.

And, the intangible assets include patents, copyrights, goodwill, etc.

The computation of the total assets are shown below:

= Cash + inventory + equipment

where,

Cash = Cash contribution -  purchase of inventory for cash - equipment purchased for cash + borrowed amount

= $60,400 - $10,400 - $10,000 + $30,400

= $70,400

And, the remaining items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $70,400 + $10,400 + $70,400

= $151,200