Question

The following transactions occurred during May, the first month of operations for Hunter Products, Inc: * Issued 54,000 shares of capital stock to the owners of the corporation in exchange for $648,000 cash. * Purchased a piece of land for $440,000, making a $170,000 cash down payment and signing a note payable for the balance. * Made a $64,000 cash payment on the note payable from the purchase of land. * Purchased equipment on credit from BBW, Inc. for $67,000.
What is the balance in the Cash account at the end of May?

Answer 1

Answer:

$414,000

Explanation:

Calculation of balance of cash account:

Issuance of capital stock to the        $648,000

owners of the corporation  

Cash down payment for purchase   ($170,000)

a piece of lane

Cash payment on the note payable ($64,000)

from the purchase of land

Balance in the Cash account           $414,000

at the end of May