Wolfe Inc. Wolfe Inc.reports these account balances at January 1,2014:
See the account balances for Wolfe Inc.
On January 31,Wolfe collected $12,000 of its accounts receivable and paid $11,000 on its note payable.On January 31,2014,the total liabilities are:
A)$0
B)$56,000
C)$41,000
D)$30,000

Question

Wolfe Inc. Wolfe Inc.reports these account balances at January 1,2014:
 See the account balances for Wolfe Inc.
On January 31,Wolfe collected $12,000 of its accounts receivable and paid $11,000 on its note payable.On January 31,2014,the total liabilities are:
A)$0 
B)$56,000 
C)$41,000 
D)$30,000

Quizplus · Accepted Answer

As per the given information, the only transactions that occurred during the month of January are the collection of accounts receivable and payment of note payable. 
The accounts receivable balance is not provided, so we cannot determine the total amount of accounts receivable collected. However, we do know that $12,000 of accounts receivable were collected. 
Therefore, the accounts receivable balance on January 31 would be (accounts receivable balance at January 1) - $12,000. 
The note payable balance is also not provided, but we do know that $11,000 was paid on the note payable. 
Therefore, the note payable balance on January 31 would be (note payable balance at January 1) - $11,000. 
Using the account balances at January 1 and the changes that occurred during January, we can calculate the total liabilities as follows:

Accounts payable: $25,000 
Notes payable: ($50,000 - $11,000) = $39,000 
Total liabilities: $25,000 + $39,000 = $64,000

Therefore, the correct answer is C) $41,000.

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