Park & Company was recently formed with a $5,000 investment in the company by shareholders.The company then borrowed $2,000 from a local bank,purchased $1,000 of supplies on account,and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance.Based on these transactions,the company's total assets are:

Question

Quizplus · Accepted Answer

The total assets are calculated as follows: Initial cash investment ($5,000) + borrowed cash ($2,000) + supplies on account ($1,000) + equipment ($5,000) = $13,000. However, $2,000 was paid in cash for the equipment, reducing cash by $2,000. Therefore, total assets = $13,000 - $2,000 = $11,000.

Park & Company Was Recently Formed with a $5,000 Investment