Question

A company was formed with $61,300 cash contributed by its owners in exchange for common stock. The company borrowed $31,300 from a bank. The company purchased $11,300 of inventory and paid cash for it. The company also purchased $71,300 of equipment by paying $10,000 in cash and issuing a note for the remainder. What is the amount of the total liabilities to be reported on the balance sheet?

Answer 1

Answer:

92,600

Explanation:

The first amount is equity because is money from the owners and liabilities are debt with external sources like banks or other companies for instance, 31,300 it is because they borrow that amount from a bank plus (71,300 - 10,000 = 61,300) so 31,300 + 61,300 is the total amount of liabilities.