Question

Tustin's catering began with cash of $9000. Tustin then bought supplies for $2,100 on account. Separately, Tustin paid 5,500 for equipment. Answer these questions.

a. How much in total assets does Tustin have?
b. How much in liabilities does Tustin owe?

Answer 1

Tustin's total assets amount to $16,600, calculating by adding the cash, equipment costs, and supplies. The liabilities amount to $2,100, which is the money owed for the supplies purchased on account.

Step-by-step explanation:

To determine the total assets that Tustin's catering has, we add together the cash with the value of the equipment and supplies. The original cash was $9,000, plus Tustin paid $5,500 for equipment. Even though supplies were bought on account, they still count as an asset, adding $2,100 to the total. So, the calculation for total assets is:

$9,000 (Cash) + $5,500 (Equipment) + $2,100 (Supplies) = $16,600

Tustin's total assets amount to $16,600.

The liabilities refer to the money that the company owes to others, which in this case is the amount paid for supplies on account. Therefore, Tustin's liabilities are:

$2,100 (Supplies on account)

Hence, Tustin owes $2,100 in liabilities.