Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January:
Issued 10,000 shares of common stock for $15,000 cash.
Purchased land for $12,000, signing a note payable for the full amount.
Purchased office equipment for $1,200 cash.
Received cash of $14,000 for services provided to customers during the month.
Purchased $300 of office supplies on account.
Paid employees $10,000 for their first month's salaries.
What was the balance of Gotebo's Cash account following these six transactions?
A) $29,800.
B) $19,300.
C) $17,800.
D) $22,400.
Answer: C
The Accounts Payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month. The ending balance was $10,000.
How much did the company pay to creditors during the month?
A) $50,000.
B) $52,000.
C) $60,000.
D) $62,000.
Answer: B
