Question

Land $ 170,000 Equipment 66,000 Salaries Payable ? Notes Payable 88,000 Supplies 14,000 Cash 26,000 Common Stock 100,000 Retained Earnings 40,000 Accounts Payable ? Prepaid Rent 12,000 If the company has total assets of $288,000, what is the balance of the company's Salaries Payable account?A. $12,000.
B. $25,000.
C. $15,000.
D. Cannot be determined given the information provided.

Answer 1

Answer:

D. Cannot be determined given the information provided.

Explanation:

The accounting equation deals with the 3 elements of the balance sheet namely; assets, liabilities and equity and the relationship between them as shown below.

Assets = Liabilities + Equity

Given;

Total asset = $288,000

Equity = Retained earnings + common stock

= 40,000 + 100,000

= $140,000

Liabilities =  $288,000 - $140,000

= $148,000

Liabilities include; Notes Payable 88,000, Salaries Payable ? Accounts Payable ?

Since the Salaries Payable and Accounts Payable are not known, the right option is D. Cannot be determined given the information provided.