Question

Balance Sheet

July 1

Assets		Equities
Cash	$37,504	Accounts Payable	$5,597
Accounts Receivable	5,251	Notes Payable	24,393
Inventory	14,842
Prepayments	3,199	Paid-In Capital	59,466
Equipment	61,801	Retained Earnings	33,141
Total Assets	$122,597	Total Equities	$122,597

The following were the company's July transactions:

1. borrowed $26,000 from a bank
2. bought equipment costing $10,200, paying the manufacturer $5,800 in cash and signing a note for $4,400
3. purchased a $5,000, five-year insurance policy, paying for three years in advance
4. paid back a previous loan for $3,520

6. What was the balance in the Cash account on July 31 [ignore adjusting entries]?

7. What were total assets on July 31 [ignore adjusting entries]

Answer 1

X Company
Solution-6: Computation of Cash balance on Jul 31
Cash at the beginning	$37,504.00
Add: Borrowed from Bank	$26,000.00
Less: Paid for equipment purchased	-$5,800.00
Less: Paid in advance for insurance polcy(5000/5*3)	-$3,000.00
Less: Paid back previous Loan	-$3,520.00
Cash bala on 31 July	$51,184.00
Correct answer is $51184
Solution-7: Computation of total asset on 31 July
Cash bala on 31 Jul	$51,184.00
Account Receivable	$5,251.00
Inventory	$14,842.00
Prepayment	$3,199.00
Equipment (61801+10200)	$72,001.00
Prepaid Insurance	$3,000.00
Total Asset	$149,477.00
Correct answer is $149477