On January 1, 2011, Santa Fe Accents, Inc., had a balance of $338,000 in the Investments account. During 2011, Santa Fe Accents sold investments for $125,000 cash, resulting in a $12,000 gain. On December 31, 2011, the Investments account showed a balance of $388,000. The investments purchased during 2011 totaled:

Question

Quizplus · Accepted Answer

We can use the following formula to find the investments purchased during 2011:
Investments purchased = Ending balance - Beginning balance + Investments sold - Gain/Loss
Investments purchased = $388,000 - $338,000 + $125,000 - $12,000
Investments purchased = $163,000
Therefore, the investments purchased during 2011 totaled $163,000, which is answer choice C.