Question

Mirr, Inc. was incorporated on January 1, year 1, with proceeds from the issuance of $750,000 in stock and borrowed funds of $110,000. During the first year of operations, revenues from sales and consulting amounted to $82,000, and operating costs and expenses totaled $64,000. On December 15, Mirr declared a $3,000 cash dividend, payable to stockholders on January 15, year 2. No additional activities affected owners' equity in year 1. Mirr's liabilities increased to $120,000 by December 31, year 1. On Mirr's December 31, year 1 balance sheet, total assets should be reported at:_______

Answer 1

Answer:

$885,000

Explanation:

Calculation for the total assets should be reported

Using this formula

TOTAL ASSETS =Total of liabilities + Total stockholders' equity

Initial equity $750,000

Income $18,000

($82,000-$64,000)

Dividends ($3,000)

12/31 Total stockholders' equity $765,000

Add Liabilities of $120,000

Total ASSETS $885,000

Therefore On Mirr's December 31, year 1 balance sheet, total assets should be reported at $885,000