Asked by Kylor Kauahi on May 26, 2024
Verified
A company's January 1,2019 balance sheet reported total assets of $120,000 and total liabilities of $40,000.During January 2019,the following transactions occurred: (A) the company issued stock and collected cash totaling $30,000; (B) the company paid an account payable of $6,000; (C) the company purchased supplies for $1,000 with cash; (D) the company purchased land for $60,000,paying $10,000 with cash and signing a note payable for the balance.What is total stockholders' equity after the transactions above?
A) $30,000.
B) $110,000.
C) $80,000.
D) $194,000.
Total Liabilities
Total Liabilities represent the sum of all financial obligations a company owes to outside parties, including loans, accounts payable, and mortgages.
Note Payable
A financial obligation or loan evidenced by a written promise to pay a specific amount on a future date or over a certain period.
- Acquire knowledge on the treatment of stockholders' equity in diverse transactions.
Verified Answer
KH
Krystal Hill-DavidsonMay 26, 2024
Final Answer :
B
Explanation :
Stockholders' equity initially is $80,000 ($120,000 in assets - $40,000 in liabilities). Transaction A increases equity by $30,000 (issuing stock). Transactions B, C, and D affect assets and liabilities but not directly stockholders' equity. After these transactions, stockholders' equity is $110,000 ($80,000 + $30,000).
Learning Objectives
- Acquire knowledge on the treatment of stockholders' equity in diverse transactions.