Question

At December 31, Year 1, the accounting records of Hercules Manufacturing, Incorporated contain the following items:

Accounts Payable $12,000
Accounts Receivable $30,000
Land $90,000
Cash $7,000
Building $250,000
Equipment?
Notes Payable $135,000
Capital Stock $188,000
Retained Earnings $140,000

If Retained Earnings at December 31, Year 1, is $140,000, total assets amounts to what?

Answer 1

The total assets for Hercules Manufacturing, Incorporated at December 31, Year 1, amount to $475,000. This is calculated using the accounting equation and summing the provided equity and liabilities figures.

Step-by-step explanation:

To calculate the total assets at December 31, Year 1, for Hercules Manufacturing, Incorporated, we need to add up all the assets listed. These include Accounts Receivable, Land, Cash, and Building. However, the value of Equipment is not provided, which means we can infer it from the accounting equation: Assets = Liabilities + Equity. The equity is given by Capital Stock and Retained Earnings. So, assuming the only liabilities provided are Accounts Payable and Notes Payable, the equation would look like this:

Assets = (Accounts Payable + Notes Payable) + (Capital Stock + Retained Earnings)

Assets = ($12,000 + $135,000) + ($188,000 + $140,000)

Assets = $147,000 + $328,000

Assets = $475,000

Therefore, the total assets amount to $475,000 at December 31, Year 1.