The following transactions occurred during March, the first month of operations

Question

The following transactions occurred during March, the first month of operations for Quality Galleries, Inc.

* Capital stock was issued in exchange for $360,000 cash.
* Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance.
* Made a $35,000 cash payment on the note payable from the purchase of equipment.
* Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale.

What is the total owners' equity at the end of March?

Explanation / Answer

B) Net income for January will be overstated. #2) On June 18, Baltic Arena paid $6,600 to Marvin Maintenance, Inc. for cleaning the arena following a monster truck show held on June 9th. This transaction: C) Causes a decrease in owners' equity by increasing expenses for June. #3) The following transactions occurred during March, the first month of operations for Quality Galleries, Inc.: * Capital stock was issued in exchange for $360,000 cash. * Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance. * Made a $35,000 cash payment on the note payable from the purchase of equipment. * Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale. Refer to the above data. What are total assets of Quality Galleries at the end of March? 360,000 + 180,000 - 60,000 - 35,000 = C) $445,000.

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