A Company's January 1,2010 Balance Sheet Reported Total Assets of $150,000

question 118

Multiple Choice

A company's January 1,2010 balance sheet reported total assets of $150,000 and total liabilities of $60,000.During January 2010,the company completed the following transactions:
(A) paid a note payable using $10,000 cash (no interest was paid) ; (B) collected a $9,000 accounts receivable; (C) paid a $5,000 accounts payable; and (D) purchased a truck for $5,000 cash and by signing a $20,000 note payable from a bank.The company's January 31,2010 balance sheet would report which of the following? $$\begin{array} { l l c } { \text { Assets } } & \text { Liabilities } & \text { Stockholders’ Equity } \\\text { A. } \$ 150,000 & \$ 60,000 & \$ 90,000 \\\text { B. } \$ 155,000 & \$ 65,000 & \$ 90,000 \\\text { C. } \$ 160,000 & \$ 75,000 & \$ 85,000 \\\text { D. } \$ 170,000 & \$ 100,000 & \$ 70,000\end{array}$$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Maintenance

The tasks and actions taken to preserve or restore equipment, systems, or structures to an operational condition or to prevent failure.

Tax-oriented Lease

A leasing arrangement designed primarily to exploit tax advantages, often allowing the lessee to deduct lease payments as business expenses.

Financial Lease

A type of lease in which the lessee assumes both the risks and rewards of ownership of the asset, typically for its entire useful life.

Lessor

The individual or entity that rents or leases their property or asset to another person, referred to as the lessee.