Question

Johnson Waterworks Company provides plumbing services. The company is a sole proprietorship. Transactions during the first year of operations are provided below. a) The owner, Mitchell Johnson, contributed $14,000 cash in exchange for capital b) Paid $1,100 for equipment to be used for plumbing repairs. c) Borrowed $14,000 from a local bank and deposited the money in the checking account. d) Paid $600 in rent for the year. e) Paid $300 for plumbing supplies to be used on various jobs next year. Completed a plumbing repair for a law firm and received $3,400. Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of $300 are left at the end of the year. OA. $28,000 O B. $1,100 OC. $1,400 D. $30,800

Answer 1

D. $30,800

Step-by-step explanation:

The computation of the total assets is shown below:

= Cash + equipment + supplies

where,

Cash would be

= Capital - paid cash for equipment + borrowed amount - rent paid - supplies + received amount

= $14,000 - $11,000 + $14,000 - $600 - $300 + $3,400

= $19,500

And, the other items would be same

So, the total assets would be

= $19,500 + $11,000 + $300

= $30,800