At the beginning of April, Warren Corporation\'s assets totaled $250,000 and lia

Question

At the beginning of April, Warren Corporation's assets totaled $250,000 and liabilities totaled $70,000. During April the following summarized transactions occurred:

Additional shares of stock were sold for $25,000 cash. A building costing $105,000 was purchased using $15,000 cash and by signing an $90,000 long-term note payable. Short-term investments costing $10,000 were purchased using cash. $11,000 was paid to an employee as a loan; the employee signed a six-month note in exchange for the loan.

How much are Warren's total assets at the end of April?

a. $390,000

b. $260,000

c. $365,000

d. $260,000

Explanation / Answer

Calculation of Total Assets at the end of April:

So, the correct option is c. $365,000

Amount($) Assets in the beginning 250,000 + Cash Received by sale of Stock 25,000 + Building Purchased 105,000 - Cash Paid for Building 15,000 + Short Term Investment 10,000 - Cash paid for Short Term Investment 10,000 + Note Receivable from Employee 11,000 - Cash Paid to Employee as a loan 11,000 Assets at the end 365,000

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