Question

B9-lR Company began operations in 2025 and entered into the following
transactions during the year:

February 15:     Sold common stock to owners for $367,000 cash.

March 1:         Purchased equipment for $85,000 cash. The equipment
                 was assigned a life of six years and a residual
                 value of $4,000.

April 30:        Lent a customer $60,000 on a 10-month, 10% note
                 receivable.

May 22:          Purchased inventory costing $38,000 on account.

June 1:          Received $23,000 cash from a customer for services
                 to be performed over the next ten months.

August 1:        Purchased a 4-year insurance policy for $84,000 cash.

August 19:       Sold ¾ of the inventory purchased on May 22 for $132,000.
                 The customer paid ½ of the bill on August 19 and agreed
                 to pay the other ½ at a future point in time.

September 16:    Paid $11,000 to the supplier who the inventory was
                 purchased from on May 22.

December 31:     Received a $41,000 bill from the utility company. B9-lR
                 Company will pay the bill next month.

December 31:     Recorded all necessary adjusting entries.

Calculate the total assets reported in B9-lR Company's December 31 2025
balance sheet.

Answer 1

Date	Accounting Description	Dr.	Cr.
Feb-25	Cash A/c Dr.	367000
	To Share Capital A/c		367000
	( Being Capital Introduced
1-Mar	Equipment A/c Dr.	85000
	To Cash A/c		85000
	( Being Equipment Purchased for Cash)
30-Apr	Loan Receivable 10 % Note	60000
	To Cash A/c		60000
	( Being Loan Lent)
22-May	Inventory A/c Dr.	38000
	To Account Payable A/c		38000
	( Being Inventory Purhased on Credit)
1-Jun	Cash A/c Dr.	23000
	To Unearned Revenue A/c		23000
	( Being Advance Payment received)
1-Aug	Prepaid Insurance A/c Dr.	84000
	To Cash A/c		84000
	( Being Insuance Purchased for 4 Years)
19-Aug	Cash A/c Dr.	66000
	Debtors A/c Dr.	66000
	To Sale A/c		132000
	( Being Sale of Goods)
19-Aug	COGS A/c Dr.	28500
	To Inventory A/c		28500
	( Being Inventory Sold)
16-Sep	Account Payable A/c Dr.	11000
	To Cash A/c		11000
	( Being Cash Paid)
31-Dec	Utility Expenses A/c Dr.	41000
	To Utility Expenses Payable A/c		41000
	( Being Utility Expenses Accrued)
31-Dec	Depreciation A/c Dr.	13500
	To Equiment A/c		13500
	( Being Depreciatiion Charged on SLM Basis
31-Dec	Loan Receivable 10% Note A/c Dr.	4500
	To Interest Income A/c		4500
	( Being Interest Income Accrued)
31-Dec	Unearned Revenue A/c Dr.	16100
	To Sale of Service A/c		16100
	( Being Service Accomplished agianst Advance)
31-Dec	Insurance Expenses A/c Dr.	8750
	To Prepaid Insurance		8750
	( Being Insurance Expenses Charged for the Period 5 Months)

Added	Amount	Reduced	Amount
Cash	367000
Equipment	85000	Cash	-85000
Loan Receivable 10 % Note	60000	Cash	-60000
Inventory	38000
Cash	23000
Prepaid Insurance	84000	Cash	-84000
Cash	66000
Debtors	66000	Inventory	28500
		Cash	-11000
		Equipment	-13500
Loan Receivable 10 % Note	4500
		Prepaid Insurance	-8750
Net Balance ( Total Assets)	793500		-233750	559750
Working Notes for Deecmber End Adjustments
Depreciation Shall be Charged on SLM Basis : (85000-4000)/6 = 13500
Loan Interets is 10 Month , but 2025 total ends is 9 months from the date of Issue. Hence Interets incoem for 9 Months shall be accrued as Income. : 60000*9/12*10%
Advance recipt is for 10 Months, Till December end, 7 Months has been completed, so, 2300 X 7 = 16100
Insurance Expenses paid for 4 years, 12 months per year, 84000 / 4 = 21000 X 5 / 12 = 8750