Lucy Morton opened an engineering office and titled the business Engineering Enterprises P.C. During its first month of operations, it completed the following transactions: I. Lucy invested $30,000 in the business, which in turn issued common stock to her.
II. The business purchased equipment on account for $6,000.
II. The business provided engineering services on account, $10,000.
III. The business paid salaries to the receptionist, $1,000.
IV. The business received cash from a customer as payment on account $6,000.
V. The business borrowed $8,000 from the bank, issuing a note payable.
Total assets would be:
A) $30,000.
B) $37,000.
C) $47,000.
D) $61,000.

Question

Quizplus · Accepted Answer

The total assets of the business can be calculated by adding up all the transactions:

I. Common stock = $30,000
II. Equipment purchased on account = $6,000
III. Accounts receivable from engineering services = $10,000
IV. Cash received from customer = $6,000
V. Note payable = $8,000

Total assets = $30,000 + $6,000 + $10,000 + $6,000 + $8,000 = $47,000. Therefore, the correct answer is option C.

Lucy Morton Opened an Engineering Office and Titled the Business