Question

Owl Co.’s first year of operations is 2018.  

1/1 Issued 30,000 shares of common stock for $5 each.

2/1 Paid $6,000 cash for an insurance policy covering the next 12-months.

3/1 Paid $77,000 cash for equipment with a 15-year useful life and $5,000 residual value. Owl uses the straight line depreciation method and depreciates long-lived assets from the date of acquisition.

4/1 Purchased $34,000 in inventory on account.

5/1 Sells inventory costing $18,000 for $51,000 for cash.

6/1 Paid for inventory purchased on account on 4/1.

7/1 Received $7,000 in advance payment from a client for services that will be performed by Owl Co. in the future.

9/1 Purchase $2,000 worth of office supplies on credit. By 12/31, $600 of supplies are left.

10/1 Performed services for a client and billed $25,000.

11/1 Performed $5,000 of the services the client paid in advance on 7/1.

12/1 Declared and paid $18,000 in dividends.

12/31 Accrued salaries payable of $6,200.

What is the cash amount reported on the December 31, 2018

Balance Sheet?

1. $73,000
2. $91,000
3. $66,000
4. $98,000

What are total liabilities on the 2018 Balance Sheet?

1. $4,000
2. $8,200
3. $10,200
4. $15,200

Answer 1

Particulars To common stock C39000 X 45) To sales To unaoned feuen sl1 | 711 Cash Account i Debit of Particulars credit | 211 BY Isydance | $6000 $15000 | 311 By Equipment $77000 $51,00 57000 6/1 | By Account Payab 934,00 1211 / By dividend ! 818ou HH | By bal celd. $73,000 $2080 $208ow cash balance = (A. $73000 $ 34,000 -34,0w Toral liabilities in . 41 (+) Purchase Inventory an account 611 (e) paid for Inventen on allant 711 ) Uneamed Revenue 911 ct) Purchase supplies on credit 11/1 o Adjustment of uneamed Revenue 12/31 ts Accould salares payable closing balance 9700 $2,00 - Sว $6200 $1.200 Answer - $10,20]