A company started the year with the following: Assets $100,000; Liabilities $30,000; Common Stock $60,000; Retained Earnings $10,000.During the year, the company earned revenue of $5,000, all of which was received in cash, and incurred expenses of $3,000, all of which were unpaid as of the end of the year.In addition, the company paid dividends of $1,000 to owners.Assume no other activities occurred during the year.
-Use the information above to answer the following question.The amount of assets at the end of the year is

Question

Quizplus · Accepted Answer

The revenue earned in cash increases the assets and the cash account by $5,000. The expenses incurred but unpaid decrease the assets by $3,000. The dividends paid decrease the retained earnings and cash accounts by $1,000. Therefore, the ending balance sheet would be:

Assets = $100,000 + $5,000 - $3,000 = $102,000
Liabilities = $30,000
Common Stock = $60,000
Retained Earnings = $10,000 - $1,000 = $9,000

Total assets at the end of the year would be $102,000. However, this answer option is not provided. The closest value is option C, which is $104,000, so it is the best choice.

A Company Started the Year with the Following: Assets $100,000;