Question

Suppose a local company has the following balance sheet accounts:

Accounts Balances Accounts Balances
Land $ 8,000 Cash 6,200
Equipment ? Stockholders' Equity 12,500
Salaries Payable 3,300 Accounts Payable 1200
Notes Payable ? Prepaid Rent 2,200
Supplies 1,600

Required:
Calculate the missing amounts assuming the business has total assets of $30,000.
Equipment_____________
Notes Payable____________

Answer 1

Equipment $12,000

Notes payable $13,000

Step-by-step explanation:

We know that

Total assets = Land + cash + equipment + prepaid rent + supplies

$30,000 = $8,000 + $6,200 + equipment + $2,200 + $1,600

$30,000 = $18,000 + equipment

So, the equipment = $30,000 - $18,000

= $12,000

Current liabilities = Salaries payable + account payable + notes payable

= $3,300 + $1,200 + notes payable

= $4,500 + notes payable

Total assets = Total liabilities + Shareholder equity

$30,000 = $4,500 + notes payable + $12,500

$30,000 = $17,000 + notes payable

So, the notes payable

= $30,000 - $17,000

= $13,000