Question

During its first month of operations, Pluto Company (1) Borrowed $200,000 from a bank, and then (2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account, (5) paid $30,000 for cash for accounts payable, and (6) paid $60,000 cash for utilities. What is the amount of total assets at the end of the month?

Answer 1

Equity Transaction 1 2 Liabilities 200,000 40,000 + + + $ $ $ $ Assets 200,000 80,000 40,000 60,000 120,000 30,000 -60,000 330,000 = = $ = $ = = $ = 1 = $ = = $ 60,000 + $ 120,000 -30,000 $ $ $ + + + $ $ 60,000 60,000 Totals 270,000 Total assets at the end of the month is $330,000.