At the beginning of April,Warren Corporation's assets totaled $240,000 and liabilities totaled $60,000.During April the following summarized transactions occurred: Additional shares of stock were sold for $20,000 cash.
A building costing $95,000 was purchased using $10,000 cash and by signing an $85,000 long-term note payable.
Short-term investments costing $9,000 were purchased using cash.
$10,000 was paid to an employee as a loan;the employee signed a six-month note in exchange for the loan.
How much are Warren's total liabilities at the end of April?

Question

Quizplus · Accepted Answer

Warren Corporation's total liabilities at the end of April are $145,000. This is calculated by starting with the initial liabilities of $60,000, adding the $85,000 long-term note payable for the building purchase, and considering that the $10,000 loan to the employee does not change total liabilities, as it is an exchange of one asset (cash) for another (note receivable).

At the Beginning of April,Warren Corporation's Assets Totaled $240,000 and Liabilities