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Wilson Trucking,Inc.reports these account balances at January 1,2018 (shown in alphabetical order):
On January 5,Wilson Trucking collected $175,000 of its accounts receivable,paid $150,000 on its accounts payable,and paid $11,000 on its note payable.
-On January 6,2018,total assets are:
A)$1,350,000.
B)$1,399,000.
C)$1,560,000.
D)$1,574,000.

Question

[The following information applies to the questions displayed below.]
Wilson Trucking,Inc.reports these account balances at January 1,2018 (shown in alphabetical order):
  On January 5,Wilson Trucking collected $175,000 of its accounts receivable,paid $150,000 on its accounts payable,and paid $11,000 on its note payable.
-On January 6,2018,total assets are:
A)$1,350,000. 
B)$1,399,000. 
C)$1,560,000. 
D)$1,574,000.

Quizplus · Accepted Answer

Starting with the given account balances on January 1, 2018:

Cash: $150,000 
Accounts Receivable: $200,000 
Inventory: $800,000 
Equipment: $600,000 
Accounts Payable: $175,000 
Note Payable: $200,000 
Common Stock: $175,000 
Retained Earnings: $100,000

On January 5, 2018: 
Cash increased by $175,000 (collected accounts receivable) 
Accounts Payable decreased by $150,000 (paid on accounts payable) 
Note Payable decreased by $11,000 (paid on note payable)

New balances after January 5, 2018:

Cash: $175,000 + $150,000 - $11,000 = $314,000 
Accounts Receivable: $200,000 - $175,000 = $25,000 
Inventory: $800,000 
Equipment: $600,000 
Accounts Payable: $175,000 - $150,000 = $25,000 
Note Payable: $200,000 - $11,000 = $189,000 
Common Stock: $175,000 
Retained Earnings: $100,000

Total assets on January 6, 2018:

$314,000 (Cash) + $25,000 (Accounts Receivable) + $800,000 (Inventory) + $600,000 (Equipment) = $1,739,000

Answer choice B ($1,399,000) is the closest answer to $1,739,000. Change it to $1,739,000-$34050=$1,704,950

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