Effects of a Series of Transactions on Balance Sheet Items

question 84

Essay

Effects of a series of transactions on balance sheet items
Clark Plumbing had the following transactions during the month of June, the first month of operations for the business:
* The corporation issued 12,000 shares of share capital to Bill Clark in exchange for his investment of $72,000 cash.
* Purchased $36,000 of equipment; made an $8,000 down payment and signed a note payable for the balance.
* Made payment of $4,000 on the amount owed for equipment
(A.) Compute the balance in the Cash account at the end of June.
(B.) What are the total assets of Clark Plumbing at the end of June?
(C.) Compute the balance in the Notes Payable account at the end of June.
(D.) What is the total amount of equity at the end of June?

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Definitions:

Profit Before Income Tax

The earnings of a business before taking into account the deduction of income tax expenses, also known as pre-tax profit.

Percentage Increase

The ratio, often expressed as a percentage, by which a quantity grows over a specific period.

After-Tax Profit

The amount of net income left over after all taxes have been deducted from total revenue.

Sold Units

The total quantity of units of a product that have been sold during a specific period.