Nelson Company experienced the following transactions during Year 1, its first year in operation.Acquired $12,000 cash by issuing common stockProvided $4,600 of services on accountPaid $3,200 cash for operating expensesCollected $3,800 of cash from customers in partial settlement of its accounts receivablePaid a $200 cash dividend to stockholdersWhat is the amount of total assets that will be reported on the balance sheet as of December 31, Year 1?
A)$12,400
B)$12,600
C)$13,400
D)$13,200

Question

Quizplus · Accepted Answer

Total assets can be calculated using the basic accounting equation: Assets = Liabilities + Equity. 
- As there are no liabilities mentioned in the question, we can assume that there are none.
- Equity can be calculated as the sum of the common stock and retained earnings. As there are no earnings or losses mentioned in the question, we can assume that retained earnings are zero.
Therefore, Equity = Common Stock = $12,000
Now, we can calculate total assets as:
Total Assets = Equity + Liabilities
Total Assets = $12,000 + $1,200 (which is the difference between the total revenues of $4,600 and the expenses of $3,200)
Total Assets = $13,200

Nelson Company Experienced the Following Transactions During Year 1, Its