In January 2013, a new consulting firm recorded the following transactions: 1. I

Question

In January 2013, a new consulting firm recorded the following transactions:

1. Issued stock to investors for $20,000 cash.
2. Purchased $5,000 of equipment, paying 20% in cash and giving a promissory note for the balance.
3. Received $9,000 in cash for consulting services performed in January.
4. Bought $1,500 of supplies on account; all of the supplies were used in January.
5. Provided consulting services for clients and billed them $16,000.
6. Paid $750 toward the supplies purchased in #4.
7. Paid $3,000 to employees for work performed in January.
8. Received a bill for rent and utilities for January of $3,400.

What is the amount of Current Assets on the classified balance sheet at the end of January?

Explanation / Answer

$40,250 Statement showing computations Particulars Amount 1) Cash                20,000.00 2) Payment in cash = 5000*20%                (1,000.00) 3) cash Received                  9,000.00 4) Supplies is 0 since used thus ending bal is nil                               -   5) Accounts Receivable                16,000.00 6) Cash paid                   (750.00) 7) Paid salaries and wages                (3,000.00) Current Assets                40,250.00

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