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The bookkeeper for Wood Mfg.made the following journal entry on January 30,2018:

-Before the journal entry above,Wood had assets,liabilities,and owners' equity of $450,000,$100,000,and $350,000,respectively.What are total assets immediately after the above transaction occurs?
A)$221,000.
B)$671,000.
C)$735,500.
D)$450,000.

Question

[The following information applies to the questions displayed below.]
The bookkeeper for Wood Mfg.made the following journal entry on January 30,2018:
 
-Before the journal entry above,Wood had assets,liabilities,and owners' equity of $450,000,$100,000,and $350,000,respectively.What are total assets immediately after the above transaction occurs?
A)$221,000. 
B)$671,000. 
C)$735,500. 
D)$450,000.

Quizplus · Accepted Answer

Without knowing the details of the journal entry, we cannot determine the exact impact on assets, liabilities, and equity. However, we know that the total of assets, liabilities, and equity must remain in balance after the transaction. Therefore, the total assets must be $450,000 (before the journal entry) plus the impact of the journal entry. The only answer choice that is greater than $450,000 is B, which is $671,000. Therefore, the best choice is B.

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