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The following transactions occurred during May,the first month of operations for Hunter Products,Inc.:
* Issued 50,000 shares of capital stock 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,Inc.for $63,000.
-What are total assets of Hunter Products at the end of May?
A)$913,000
B)$790,000
C)$853,000
D)$916,000

Question

Quizplus · Accepted Answer

- The cash received from issuing capital stock is $600,000.
- The cost of land is $400,000, and since a $150,000 cash down payment was made, the remaining balance on the note payable is $250,000.
- $60,000 cash was paid towards the note payable, leaving a balance of $190,000.
- The equipment purchased on credit does not affect total assets since no cash was paid yet.
Therefore, total assets at the end of May are:
Cash $600,000
Land $400,000
Equipment $63,000
Total Assets $1,063,000
Minus Note Payable (190,000)
Total Assets $853,000

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