Question

The following shows the ending balances of accounts for A Company as of December 31, 2018.

Account	Debits	Credits
Taxes payable		30,000
Inventory	285,000
Investments	140,000
Retained earnings		202,000
Prepaid expenses	148,000
Accumulated depreciation - equipment		110,000
Deferred revenue		80,000
Cash	65,000
Common stock		400,000
Equipment	320,000
Accounts payable		60,000
Accounts receivable	160,000
Notes payable		200,000
Allowance for uncollectible accounts		16,000
Interest payable		20,000
Total	1,118,000	1,118,000

Additional information:

1. Prepaid expenses include $120,000 paid on December 31, 2018 for a two-year lease on the company's office building. The remaining prepaid expenses are for items that management expects will be consumed during 2019.

2. Investments include $30,000 in Treasury bills purchased on November 30, 2016 and that mature on January 30, 2019. The remaining investments are marketable securities that management expects to sell during 2019.

3. The deferred revenue is for magazine subscriptions that are one year or less.

4. The notes payable consists of a $40,000 note due in six months, a $100,000 note due in five years, and $60,000 note due in three annual installments of $20,000 with the next installment due on August 31, 2019.

Determine the amount of total assets.

992,000

$992,000

992000

$992000

Answer 1

Solution:
Computation of Total Assets:
	Amount ($)
Inventory	2,85,000.00
Investment	1,40,000.00
Prepaid Expenses	1,48,000.00
Equipment	3,20,000.00
Less: Accumulated Depreciation	-1,10,000.00
Cash	65,000.00
Accounts Receivable	1,60,000.00
Total Assets before Adjustment	10,08,000.00
Less: Prepaid Expenses	60,000.00
(120000/2)
Adjusted Total Assets on 31st December 2018	9,48,000.00