Troy Co. began operations on January 1, 2011, with $100,000 from the issuance of stock and borrowed funds of $15,000. Net income for 2011 was $5,000 and Troy paid a $400 cash dividend on December 15. No additional activities affected owners' equity in 2011. At December 31, 2011, Troy's liabilities had increased to $18,800. In Troy's December 31, 2011, balance sheet, total assets should be reported at
A) $119,600.
B) $120,000.
C) $123,400.
D) $138,400.

Question

Quizplus · Accepted Answer

Total assets at the beginning of the year = $100,000 + $15,000 = $115,000
Net income for 2011 = $5,000
Total owners' equity at the end of 2011 = $115,000 + $5,000 - $400 = $119,600
Total liabilities at the end of 2011 = $18,800

Therefore, total assets at the end of 2011 = Total owners' equity + Total liabilities 
= $119,600 + $18,800 = $123,400. Thus, the correct option is (C).

Troy Co Began Operations on January 1, 2011, with $100,000 from from the Issuance