Question

F Co's balance sheet on January 1, 2015 had total liabilities of $125,000 and total equity of $585,000. On January 20, 2015 the company raised additional capital by selling 100,000 shares of $2 par value common stock for $4 a share. The company paid expenses of $65,000 in relation to this capital raise. These expenses were correctly charged against additional paid in capital. On February 10, 2015 the company borrowed $250,000 on a note payable from a bank. During the balance of 2015 the company was able to pay down the note by $40,000.

On July 1, 2015 the company purchased equipment for $100,000 which it paid for $50,000 in cash and the balance in a note payable. The note balance at December 31, 2015 was reduced to $40,000.

During 2015, the company's revenues totaled $2,550,000 and operating expenses totaled $725,000. The operating expenses DID NOT include depreciation on the newly purchased equipment. F Co depreciates equipment over a 10 year life using straight line depreciation.

On December 15, 2015, F Co declared a dividend of $1 per share payable on December 28, 2015. The dividend was paid on time.

On December 31, 2015, the company purchased 5,000 shares of treasury stock from a retiring partner for $5 per share.

The company began the year with 150,000 shares outstanding.

Liabilities other than the notes payable mentioned above increased by $20,000 during 2015.

Compute TOTAL ASSETS as of December 31, 2015.

(Please show all work)

Answer 1

Total liabilities as on January 1,2015	125000
Total equity as on January 1,2015	585000
Total Assets as on January 1,2015	710000

Total liabilities and Equity = Total Assets

Situation	Changes in Total assets
Additonal capital raise	Cash balance increased	400000
Paid Expenses	Cash balance decreased	-65000
Borrowed from bank on a note	Cash balance increased	250000
Purchased equipment	Asset value increased	100000
Cash paid for Equipment purchased	Cash balance decreased	-50000
Paid for note	Cash balance decreased	-40000
Revenues	Cash/Accounts receivables increased	2550000
Operating expenses	Cash balance decreased	-725000
Accumulated depreciation (100,000/10) x 6/12	Asset value decreased	-5000
Cash dividend paid (150,000 shares+100,000 shares) x $1	Cash balance decreased	-250000
Treasury stock purchase (5000 x 5)	Cash balance decreased	-25000
Liabilities increased by $ 20,000	Assets also increased by $20,000	20000
Net increase in Total Assets		2160000
Total Assets as on January 1,2015		710000
Total Assets as on December 31,2015		2870000