The Following Transactions Occurred During May, the First Month of Operations

question 28

Multiple Choice

The following transactions occurred during May, the first month of operations for Hunter Products Limited:
* Issued 50,000 shares of share capital to the owners of the corporation in exchange for $600,000 cash
* Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance.
* Made a $60,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from BBW Limited for $63,000.

-Refer to the above data. What is the total equity at the end of May?

• A) $810,000.
• B) $600,000.
• C) $790,000.
• D) $660,000.

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Definitions:

Federal Income Tax Returns

Documents filed with the IRS to report annual income, deductions, and applicable taxes owed or refunds due to taxpayers.

Attract Capital

Strategies or actions taken by a business or country to draw in investment funds from external sources.

Nontax Paying Entity

An entity, such as a nonprofit organization, that is exempt from paying taxes to the government.

Limited Partnership

A partnership consisting of at least one general partner and one or more limited partners, with limited liability for the latter.