Question

During its first year of operations, a company entered into the following transactions: Borrowed $5,000 from the bank by signing a promissory note. Issued stock to owners for $10,000. Purchased $1,000 of supplies on account. Paid $400 to suppliers as payment on account for the supplies purchased. What is the amount of total assets at the end of the year?

Answer 1

The amount of total assets at the end of the year is $15,600

Step-by-step explanation:

The computation of the total assets is shown below:

= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies

= $5,000 + $10,000 + $1,000 - $400

= $15,600

We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added