Question

During its first year of operations, Maria Rose invested $25,000 in Roseland Inc. in exchange for its common stock. The company earned $68,000 of revenues and incurred $32,000 of expenses. A cash dividend of $5,000 was paid to Maria. At the end of the year, the company owed $24,000 to its creditors. At the end of the year, the company's assets totaled:

Answer 1

Answer:

$80,000

Explanation:

During the first year of oeration Maria Rose invested $25,000 in Roseland incorporation

The company earned $68,000 in revenue

They incurred expenses of $32,000

A cash dividend of $5,000 was paid out to Maria

The company owed $24,00£ to its creditors

Assets = liabilities - equity

The first step is to calculate the equity

Equity= common stock - dividend + revenue-expenses incurred

= $25,000-$5,000+$68,000-$32,000

= $20,000+$36,000

= $56,000

Therefore the company's assets can be calculated as follows

= $24,000 + $56,000

= $80,000

Hence the total company's assets is $80,000