Question

McmanusCo began business this year and entered into the following transactions during the year. McmanusCo issued common stock in exchange for cash of $80,000 from stockholders, borrowed $40,000 from a bank, bought $12,000 of inventory on account, and purchased $32,000 of equipment by paying $12,000 in cash and issuing a note for the remainder. What the amount of total assets to be reported on the balance sheet at the end of the year? Multiple Choice O $128,000 a $104,000 $120.000 $120,000 O $152.000

Answer 1

To know the total Assets prepared Accounting Equation using following format:-

McManus Co.

Tebular format of Accounting Equation

No.			Assets			=			Liabilities		+		Stockholders Equity
	Cash	+	Inventory	+	Equipment	=	Accounts Payable	+	Borrowings	+	Notes Payable	+	Common Stock
1.	$80,000	+		+		=		+		+		+	$80,000
2.	40,000	+		+		=		+	$40,000	+		+
3.		+	$12,000	+		=	$12,000	+		+		+
4.	(12,000)	+		+	$32,000	=		+		+	$20,000	+
Bal.	$108,000	+	$12,000	+	$32,000	=	$12,000	+	$40,000	+	$20,000	+	$80,000

Calculations for Total Assets:-

Total Assets=(Cash+Inventory+Equipment)

=($108,000+$12,000+$32,000)

=$152,000

So the Amount of Total Assets to be reported on the Balance Sheet at the end of the Year is $152,000.

Answer is Option Fourth $152,000.