Lobo Co. was incorporated on July 1, 2011, with $200,000 from the issuance of stock and borrowed funds of $30,000. During the first year of operations, net income was $10,000. On December 15, Lobo paid an $800 cash dividend. No additional activities affected owners' equity in 2011. At December 31, 2011, Lobo's liabilities had increased to $37,600. In Lobo's December 31, 2011, balance sheet, total assets should be reported at
A) $239,200.
B) $240,000.
C) $246,800.
D) $276,800.

Question

Quizplus · Accepted Answer

Total assets are calculated as the sum of liabilities and owners' equity. Owners' equity at year-end is the initial equity ($200,000) plus net income ($10,000) minus dividends ($800), totaling $209,200. Liabilities are $37,600. Therefore, total assets are $209,200 + $37,600 = $246,800.

Lobo Co Was Incorporated on July 1, 2011, with $200,000 from from the Issuance