Answer:
Company's assets at the end of Year 2 were provided by creditors = 20%
Explanation:
<u>Calculation of Cash at the end of Year 2
</u>
Cash balance at the end of Year 1 $600
Less: Paid off to notes payable ($500)
Add: Earned cash revenue $700
Less: Paid cash expenses ($400)
Less: Paid cash dividend <u>($100)</u>
Cash balance at the end of Year 2 <u>$300</u>
Notes payable at the end of Year 2 = Beginning balance - Paid off
= $1,000 - $500
= $500
<u>Calculation of Notes Payable at the end of Year 2
</u>
Notes Payable at the end of Year 1 $1000
Less: Paid off to notes payable <u>($500)</u>
Notes Payable at the end of Year 2 <u>$500</u>
Total assets at the end of Year 2 = Cash + Land
= $300+2200
= $2500
Creditors at the end of the Year 2 (Notes payable) = $500
Company's assets at the end of Year 2 were provided by creditors = Creditors * 100 / Total assets
= $500 * 100 / $2500
= 20%
