Question

Use T-accounts to record the transactions below, which occur on March 12, 2018, close the T-accounts, and construct a balance sheet to answer the question.

1. Pay $4,000 owed to a supplier 2. Issue $90,000 in stock 3. Buy $16,000 worth of manufacturing supplies on credit

What is the final amount in Total Equity?

Please specify your answer in the same units as the balance sheet

Answer 1

Solution:

Accounts Payable
Particulars	Debit	Particulars	Credit
To Cash	$4,000.00	By Supplies	$16,000.00
Ending Balance	$12,000.00
Total	$16,000.00	Total	$16,000.00

Common Stock
Particulars	Debit	Particulars	Credit
Ending Balance	$90,000.00	By Cash	$90,000.00
Total	$90,000.00	Total	$90,000.00

Supplies
Particulars	Debit	Particulars	Credit
To Accounts payable	$16,000.00	Ending balance	$16,000.00
Total	$16,000.00	Total	$16,000.00

Cash
Particulars	Debit	Particulars	Credit
To Common Stock	$90,000.00	By Accounts payable	$4,000.00
		Ending balance	$86,000.00
Total	$90,000.00	Total	$90,000.00

Balance Sheet
Liabilities	Amount	Assets	Amount
Accounts payble	$12,000.00	Cash	$86,000.00
Common Stock	$90,000.00	Supplies	$16,000.00
Total	$102,000.00	Total	$102,000.00

Final amount of equity = $90,000