Question

Just before Henderson Laboratories opened for business, Eugene Henderson, the owner, had the following assets and liabilities. Cash $ 99,000 Laboratory equipment 155,000 Laboratory supplies 21,600 Loan payable 30,400 Accounts payable 22,750 Determine the totals that would appear in the firm’s fundamental accounting equation (Assets = Liabilities + Owner’s Equity).

Answer 1

Answer:

Assets = Laboratory Equipment ( Fixed asset) + Laboratory supplies (Current Asset) + Cash ( Current asset)

= 155,000 + 21,600 + 99,000

= $275,600

Liabilities = Loan Payable ( Long term liability) + Accounts Payable ( current liability)

= 30,400 + 22,750

= $53,150

Assets = Liabilities + Owners Equity

Owners Equity = Assets - Liabilities

= 275,600 - 53,150

= $222,450