X Company was formed on July 1, 2014, and had the following transactions during

Question

X Company was formed on July 1, 2014, and had the following transactions during the rest of 2014:

received $8,003 in cash contributions from the owners

purchased $8,846 worth of merchandise, all on account

sold merchandise that cost $7,462 for $10,660, all on account

paid $3,924 to suppliers for merchandise purchased on account

received $3,209 from customers for merchandise sold on account

paid $5,320 for land and equipment

borrowed cash from the bank in the amount of $4,871

What were total assets on December 31, 2014 (ignore depreciation on the equipment and interest on the loan)?

Explanation / Answer

Total assets = $20,994

Cash Inventory A/c receivable land & equipment 8,003 $8,846 (3924) (7462) 10,660 $3,209 (3209) (5320) 5320 4871 $6839 $1384 $7451 $5320

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