The Smith Corp.began business this year and entered into the following transactions during the year.The company issued common stock in exchange for cash of $80,000 from stockholders,borrowed $40,000 from a bank,bought $12,000 of inventory on account,and purchased $32,000 of equipment by paying $12,000 in cash and issuing a note for the remainder.What is the amount of total assets to be reported on the balance sheet at the end of the year?
A)$104,000
B)$120,000
C)$128,000
D)$152,000

Question

Quizplus · Accepted Answer

This company's assets include Cash,Inventory,and Equipment.(These transactions also affect its liabilities,including Notes Payable and Accounts Payable,and its stockholders' equity,including Common Stock.The impact of these transactions on its liabilities and stockholders' equity is not set forth below. )
Total assets = Cash received from stockholders of $80,000 + Inventory purchase of $12,000 + Equipment purchase of $32,000 + Cash received from bank borrowing of $40,000 − Cash used to purchase equipment of $12,000 = $152,000