Question

Suppose a local company has the following balance sheet accounts. Calculate the missing amounts assuming the business has total assets of $37,500.
Accounts Balances
Land $9,000
Equipment
Salaries Payable 4,300
Notes Payable
Supplies 2,100
Cash 7,200
Stockholders’ Equity 13,500
Accounts Payable 1,700
Prepaid Rent 3,200

Answer 1

Answer:

Equipment = $16,000

Notes payable = $18,000

Explanation:

The computations are shown below:

Total assets = Land + equipment  + Supplies + cash + prepaid rent

$37,500 = $9,000 + equipment + $2,100 + $7,200 + $3,200

$37,500 = $21,500 + equipment

So, the equipment would be

= $37,500 - $21,500

= $16,000

And,

Total assets = Total liabilities + stockholder equity

where,

Total liabilities = Salaries payable + notes payable + accounts payable

Now the value would be

$37,500 = $4,300 + notes payable + $1,700 + $13,500

$37,500 = $19,500 + notes payable

So, the notes payable would be $18,000