Baggins Company prepared a draft of its 2011 balance sheet. The draft statement reported total assets of $437,500. Included in this total assets figure were the following items:

At which amount should Baggins' total assets be correctly reported in the December 31, 2011, balance sheet?
A) $420,850
B) $421,300
C) $425,050
D) $425,500

Question

Baggins Company prepared a draft of its 2011 balance sheet. The draft statement reported total assets of $437,500. Included in this total assets figure were the following items:

At which amount should Baggins' total assets be correctly reported in the December 31, 2011, balance sheet?
A) $420,850 
B) $421,300 
C) $425,050 
D) $425,500

Quizplus · Accepted Answer

The correct amount for cash is $18,500 ($17,500 + $1,000); for accounts receivable is $127,500 ($122,500 + $5,000); for inventory is $62,500; for prepaid expenses are $6,000; for land is $175,000; for buildings is $600,000; for accumulated depreciation is ($313,500); and for accounts payable is $107,500. Adding up these amounts results in a total assets amount of $425,500. Therefore, choice D is the correct answer.

Baggins Company Prepared a Draft of Its 2011 Balance Sheet