Question

Hopewell Corporation Balance Sheet As of January 24, 2020 (amounts in thousands)
Cash	12,500	Accounts Payable	2,400
Accounts Receivable	3,600	Debt	3,700
Inventory	5,200	Other Liabilities	3,000
Property Plant & Equipment	16,700	Total Liabilities	9,100
Other Assets	600	Paid-In Capital	5,600
		Retained Earnings	23,900
		Total Equity	29,500
Total Assets	38,600	Total Liabilities & Equity	38,600

Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.

Jan 25. Consume good or service and pay expense of $3,000
Jan 26. Sell product for $20,000 in cash with historical cost of $16,000
Jan 27. Sell, deliver, and receive payment of $35,000 for service

What is the final amount in Total Assets?

Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.

Please specify your answer in the same units as the balance sheet (i

Answer 1

Solution:

1)

Journal entries:

Date	Account title and explanation	Debit	Credit
Jan 25	Retained earnings	$3,000
	Cash		$3,000
	(Consumed goods or service and paid expense)
Jan 26	Cash	$20,000
	Retained earnings		$16,000
	Inventory		$4,000
	(Sold product to customer for cash)
Jan 27	Cash	$35,000
	Retained earnings		$35,000
	(Sold, delivered and received payment for services)

Note:

The journal entry for Jan. 27 has been combined. Two separate entries may also be made.

T accounts

Cash
Beg bal	$12,500,000
Jan 26	$20,000	Jan 25	$3,000
Jan 27	$35,000
End bal	$12,870,000

Inventory
Beg Bal	$5,200,000
		Jan 26	$16,000
End ba;	$5,184,000

Retained earnings
Beg bal			$23,900,000
Jan 25	$3,000	Jan 26	$4,000
		Jan 27	$35,000
End bal			$23,936,000

Hopewell Corporation Balance Sheet As of January 24, 2020
Cash	$12,870,000	Accounts payable	$2,400,000
Accounts receivable	$3,600,000	Debt	$3,700,000
Inventory	$5,184,000	Other liabilities	$3,000,000
Property plant & equipment	$16,700,000	Total liabilities	$9,100,000
Other assets	$600,000	Paid in capital	$5,600,000
		Retained earnings	$23,936,000
		Total equity	$318,000
Total assets	$38,954,000	Total liabilities & Equity	$38,954

Final amount in Total asstes =$38,954,000

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