At December 31, 2011 the accounting records of Gordon Limited contain the following items:
$$\begin{array} { l c l r }
\text { Accounts Payable } & \$ 2,500 & \text { Accounts Receivable } & \$ 18,750 \
\text { Land } & \$ 30,000 & \text { Cash } & ? \
\text { Building } & \$ 31,250 & \text { Equipment } & \$ 40,000 \
\text { Notes Payable } & ? & \text { Share capital } & 12,500 \
\text { Retained Eamings } & \$ 125,000 & &
\end{array}$$
-Refer to the above data. If the Note Payable balance is $25,000, then the total assets of Gordon Limited at December 31, 2011 amount to:
A) $27,500.
B) $152,500.
C) $120,000.
D) $165,000.

Question

At December 31, 2011 the accounting records of Gordon Limited contain the following items:
$$\begin{array} { l c l r } 
\text { Accounts Payable } & \$ 2,500 & \text { Accounts Receivable } & \$ 18,750 \
\text { Land } & \$ 30,000 & \text { Cash } & ? \
\text { Building } & \$ 31,250 & \text { Equipment } & \$ 40,000 \
\text { Notes Payable } & ? & \text { Share capital } & 12,500 \
\text { Retained Eamings } & \$ 125,000 & &
\end{array}$$
-Refer to the above data. If the Note Payable balance is $25,000, then the total assets of Gordon Limited at December 31, 2011 amount to:
A) $27,500.
B) $152,500.
C) $120,000.
D) $165,000.

Quizplus · Accepted Answer

Total assets are calculated as the sum of Accounts Receivable, Land, Building, and Equipment. Thus, $18,750 + $30,000 + $31,250 + $40,000 = $120,000. Adding the cash balance, which is the difference between total liabilities and equity ($165,000 - $120,000), gives the total assets as $165,000.

At December 31, 2011 the Accounting Records of Gordon Limited