The following transactions occurred during May, the first month of operations for Hunter Products Limited:
* Issued 50,000 shares of share capital to the owners of the corporation in exchange for $600,000 cash
* Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance.
* Made a $60,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from BBW Limited for $63,000.

-Refer to the above data. What are total assets of Hunter Products at the end of May?

Question

The following transactions occurred during May, the first month of operations for Hunter Products Limited:
* Issued 50,000 shares of share capital to the owners of the corporation in exchange for $600,000 cash
* Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance.
* Made a $60,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from BBW Limited for $63,000.

-Refer to the above data. What are total assets of Hunter Products at the end of May?

Quizplus · Accepted Answer

Total assets at the end of May would be calculated as follows:
- Cash: $600,000 - $150,000 (down payment) - $60,000 (payment on note payable) = $390,000
- Land: $400,000
- Equipment: $63,000
Total assets = $853,000. Therefore, the best choice is C.

The Following Transactions Occurred During May, the First Month of Operations