Assume a company's 1 May 2024, financial position was: Assets $350,000, Liabilities? and Shareholders’ Equity $170,000. During May 2024 the company completed the following transactions: 1. Paid a note payable $35,000 (no interest was paid); 2. Collected an Accounts receivable, $45,000; 3. Paid an Accounts payable, $33,000; and 4. Purchased a truck for $37,500 financed by cash $7,500 and a Motor Vehicle Loan $30,000. The company's 31 May 2024 financial position is:
Assets
Liabilities
Shareholders' Equity
(i)
A. $350 000
$180 000
$170 000
(ii)
B. $312 000
$142 000
$170 000
(iii)
C. $282 000
$112 000
$170 000
Group of answer choices
Option (iii)
Option (i)
Option (ii)
None of the above options
Option (ii)
Let's analyze each transaction step by step:
-
Paid a note payable $35,000 (no interest was paid): This reduces both assets (cash) and liabilities (note payable) by $35,000. Assets: $350,000 - $35,000 = $315,000 Liabilities: $X - $35,000 = $X - $35,000
-
Collected an Accounts receivable, $45,000: This increases cash and reduces an asset (accounts receivable). Assets: $315,000 + $45,000 = $360,000 Liabilities remain the same: $X - $35,000
-
Paid an Accounts payable, $3
