If the Notes Payable balance is $25,000,then the total assets of Gordon,Inc.at December 31,2018 amount to:
A)$ 27,500.
B)$152,500.
C)$120,000.
D)$165,000.

Question

Quizplus · Accepted Answer

Since Notes Payable is a liability, the total assets can be calculated using the accounting equation: Assets = Liabilities + Equity. 
If the Notes Payable balance is $25,000, we do not have enough information to determine the equity balance. Therefore, the minimum total assets would be $25,000 + 0 = $25,000. 
Thus, choices A and C can be ruled out as they are lower than the minimum possible total assets. 
Choice B has a total assets value that is too high for the given information. 
Therefore, the best choice is D, which is a reasonable and possible total assets value given the Notes Payable balance.

If the Notes Payable Balance Is $25,000,then the Total Assets