Question

The following transactions occurred during March, the first month of operations for Canyon Products, Inc.:

1. Issued 50,000 shares of capital stock in exchange for $600,000 cash.
2. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance.
3. Made a $60,000 cash payment on the note payable from the purchase of land.
4. Purchased equipment on credit from Burton, Inc. for $63,000.
What is the balance in the Cash account at the end of March?
a. $210,000
b. $390,000
c. $810,000
d. $600,000

Answer 1

B

Step-by-step explanation:

Description Debit Credit

Share Issues Cash 600,000

Stock 600,000

Land purchase Cash 150,000

Account payable 250,000

Land 400,000

cash payment Cash 60,000

Account payable 60,000

Equipment Account payable 63,000

equipment 673,000

Cash movement = 600,000 -(150,000+60,000) = 390,000