Question

During its first month of operations, Neptune Company (1) borrowed $200,000 from a bank, and then (2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account, (5) paid $30,000 cash for accounts payable, and (6) paid $60,000 cash for utilities. What is the amount of total assets at the end of the month?

Answer 1

Answer:

$330,000

Explanation:

the journal entries would be:

Dr Cash 200,000

    Cr Notes payable - bank 200,000

Dr Equipment 80,000

    Cr Cash 40,000

    Cr Notes payable 40,000

Dr Merchandie inventory 60,000

    Cr Accounts payable 60,000

Dr Accounts receivable 120,000

    Cr Service revenue 120,000

Dr Accounts payable 30,000

    Cr Cash 30,000

Dr Utilities expense 60,000

    Cr Cash 60,000

Assets:

• Cash = 200,000 - 40,000 - 60,000 - 30,000 = $70,000
• Equipment = $80,000
• Merchandise inventory = $60,000
• Accounts receivable =$120,000
• total = $330,000

Answer 2

Answer: $330,000

Explanation:

(1) borrowed $200,000 from a bank, and then

(2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount.

(3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account,

(5) paid $30,000 cash for accounts payable, and (6) paid $60,000 cash for utilities. What is the amount of total assets at the end of the month?

Kindly check attached picture for detailed explanation