Merchant Company provides plumbing services. Transactions of Merchant during the first year of operations are given below. a) The owner, Carol Merchant, contributed $10,000 cash to form the business.
b) Paid $1,200 cash for equipment to be used for plumbing repairs.
c) Borrowed $11,000 from a local bank and deposited the money in the checking account.
d) Paid $400 rent for the year.
e) Purchased $400 of office supplies by cash.
f) Completed a plumbing repair project for a local lawyer and received $3,300 cash.
Calculate the amount of total liabilities at the end of the first year.

Question

Quizplus · Accepted Answer

The only liability transaction is the borrowing of $11,000 from a local bank. All other transactions either involve equity or expenses, not liabilities.

Merchant Company Provides Plumbing Services