Question

Given the following information, determine the amount of Cash on the balance sheet (assume there are only three assets). Liabilities equal $3,050; Stockholders' equity equals $25,000; Supplies equal $1,500; and Land equals $22,500. $4,050 None of these choices are correct. $7,050 $2,050

Answer 1

Answer:

Cash will be 5,550 dolllars

which implies none of the given posibles answers is correct.

Explanation:

we use the accounting equation:

Assets = Liabilities + Equity

Assets:

supplies 1,500

land      22,500

Liabilties 3,050

Equity 25,000

So we plug this into the equation:

Assets = Liabilities + Equity

(22,500 + cash)  = 3,050 + 25,000

cash = 3,050 + 25,000 - 22,500 = 5,550