Question

Computation of assets, liabilities, and owners' equity after a series of transactions

On April 30, 2014, the balance sheet of China Collectibles showed total assets of $700,000, total liabilities of $400,000, and owners' equity of $300,000. The following transactions occurred in May of 2014:

(1) Capital stock was issued in exchange for $165,000 cash.
(2) The business purchased equipment for $360,000, paying $160,000 cash and issuing a note payable for $200,000.
(3) The business paid $70,000 of its accounts payable.
(4) The business collected $54,000 of its accounts receivable.

Compute the following as of May 31, 2014:

(A.) Total assets $____________
(B.) Total liabilities $____________
(C.) Owners' equity $____________

Answer 1