Answer:
total liabilities = accounts payable $11,500 + unearned revenue $7,500 + debt $65,900 + other liabilities $800 = $85,700
Explanation:
Cash 9,700 Accounts Payable 1,500 Accounts Receivable 4,500 Debt 2,900 Inventory 3,800 Other Liabilities 800 Property Plant & Equipment 16,400 Total Liabilities 5,200 Other Assets 1,700 Paid-In Capital 7,300 Retained Earnings 23,600 Total Equity 30,900 Total Assets 36,100 Total Liabilities & Equity 36,100
1. Buy $15,000 worth of manufacturing supplies on credit
Supplies Accounts payable
debit credit debit credit
15,000 1,500
<u> 15,000</u>
16,500
2. Issue $85,000 in stock
Cash Paid-In Capital
debit credit debit credit
9,700 7,300
<u>85,000 </u> <u> 85,000</u>
94,700 92,300
3. Borrow $63,000 from a bank
Cash Debt
debit credit debit credit
94,700 2,900
<u>63,000 </u> <u> 63,000</u>
157,700 65,900
4. Pay $5,000 owed to a supplier
Cash Accounts payable
debit credit debit credit
157,700 16,500
<u> 5,000 </u> <u>5,000 </u>
152,700 11,500
5. Receive payment of $12,000 owed by a customer
Cash Accounts receivable
debit credit debit credit
152,700 4,500
<u>12,000 </u> <u> 12,000</u>
164,700 7,500
Due to some strange reason, accounts receivable has a debit balance (= $4,500 - $12,000). Since that is not possible, the remaining part $7,500 must be included under unearned revenue:
Accounts receivable Unearned revenue
debit credit debit credit
7,500 0
<u>7,500 </u> <u> 7,500</u>
0 0 7,500
