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Nelson Company experienced the following transactions during 2016,its first year in operation.
1.Issued $12,000 of common stock to stockholders.
2.Provided $4,600 of services on account.
3.Paid $3,200 cash for operating expenses.
4.Collected $3,800 of cash from accounts receivable.
5.Paid a $200 cash dividend to stockholders.
-The total amount of assets shown on Nelson Company's December 31,2016 balance sheet is:
A)$12,400.
B)$12,600.
C)$13,400.
D)$13,200.

Question

Use the following information for questions 
Nelson Company experienced the following transactions during 2016,its first year in operation.
1.Issued $12,000 of common stock to stockholders.
2.Provided $4,600 of services on account.
3.Paid $3,200 cash for operating expenses.
4.Collected $3,800 of cash from accounts receivable.
5.Paid a $200 cash dividend to stockholders.
-The total amount of assets shown on Nelson Company's December 31,2016 balance sheet is:
A)$12,400.
B)$12,600.
C)$13,400.
D)$13,200.

Quizplus · Accepted Answer

The total assets at the end of the year can be calculated as follows:
Total assets = (1) + (2) - (3) + (4)
Total assets = $12,000 + $4,600 - $3,200 + $3,800
Total assets = $16,200 - $3,200
Total assets = $13,000
However, the company also paid a cash dividend of $200 to stockholders. Therefore, the total assets at the end of the year would be:
Total assets = $13,000 - $200
Total assets = $12,800
Hence, the best choice is D, $13,200 is the amount closest to the calculated amount.

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