Question

11. The new bakery firm sell shares for $150,000 (1), and buy equipment for $45,000 in cash (2) , buy a new inventory of raw materials for $20,000 on account (50% in cash and 50% on credit) (3), make a loan of $37,000 (4). The business generates $30,000 of sales, 50% collected in cash and 50% to be received in the next month (5).

Now, complete the accounting transactions on the table below following each one of the 5 steps indicated in this case. What is the final amount on Assets and Liabilities & Owner’s Equity? (4 points)

Assets

Liabilities / Owner’s Equity

Step	Cash	Account Receivables	Inventory	Equipment	Notes Payable	Account Payables	Common Stock	Revenues
(1)
(2)
(3)
(4)
(5)
Total

Answer 1

	Assets	Liabilities	Owner's equity
Step	Cash	Account Receivables	Inventory	Equipment	Notes Payable	Account Payables	Common Stock	Revenues
(1)	150,000						150,000
(2)	- 45,000			45,000
(3)	- 10,000		20,000			10,000
(4)	37,000				37,000
(5)	15,000	15,000						30,000
Total	147,000	15,000	20,000	45,000	37,000	10,000	150,000	30,000

Total assets = Cash + Accounts receivables + Inventory + Equipment

= 147,000 + 15,000 + 20,000 + 45,000

= $227,000

Total liabilities = Notes payable + Accounts payable

= 37,000 + 10,000

= $47,000

Total equity = Common stock + Revenues

= 150,000 + 30,000

= $180,000