Question

On January 1, Kirk Corporation had total assets of $851,000. During the month, the following activities occurred: Kirk Corporation acquired equipment costing $6,100, promising to pay cash for it in 60 days. Kirk Corporation purchased $3,510 of supplies for cash. Kirk Corporation sold land, which it had acquired 2 years ago. The land had cost $15,100 and it was sold for $15,100 cash. Kirk Corporation signed an agreement to rent additional storage space next month at a charge of $1,010 per month. What is the amount of total assets of Kirk Corporation at the end of the month?

Answer 1

Answer:

Ending balance of assets is $ 857,100

Explanation:

Computation of total assets of Kirk Corporation

Opening Assets                                                            $ 851,000

Purchase of equipment                                               $      6,100

Purchase of supplies for cash                                     $            0

Sale of land at cost                                                       $            0

Agreement for storage space                                     $             0

Ending balance Assets                                                $ 857,100

Purchase of equipment on credit increases assets

Purchase of supplies for cash is neutral. Supplies ( considered as included in inventory) is paid in cash asset increases and decreases

Sale of land at cost is also neutral for asset purposes

Agreement to rent storage space is not an executed transaction