Question

Valley Technology Balance Sheet As of January 24, 2020 (amounts in thousands)
Cash	9,700	Accounts Payable	1,500
Accounts Receivable	4,500	Debt	2,900
Inventory	3,800	Other Liabilities	800
Property Plant & Equipment	16,400	Total Liabilities	5,200
Other Assets	1,700	Paid-In Capital	7,300
		Retained Earnings	23,600
		Total Equity	30,900
Total Assets	36,100	Total Liabilities & Equity	36,100

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. Buy $15,000 worth of manufacturing supplies on credit
Jan 26. Issue $85,000 in stock
Jan 27. Borrow $63,000 from a bank
Jan 28. Pay $5,000 owed to a supplier
Jan 29. Receive payment of $12,000 owed by a customer

What is the final amount in Total Liabilities?

Please specify your answer in the same units as the balance sheet.

Answer 1

Solution:

Journal Entries
Jan-25	Supplies	15000
	Accounts Payable		15000
Jan-26	Cash	85000
	Paid up capital		85000
Jan-27	Cash	63000
	Bank Loan		63000
Jan-28	Accounts Payable	5000
	Cash		5000
Jan-29	Cash	12000
	Accounts Receivable		12000

Accounts Payable	Cash
Jan-28	5000	Bal	1500	Bal	9700	Jan-28	5000
		Jan-25	15000	Jan-26	85000
Total	5000	Total	16500	Jan-27	63000
		Balance	11500	Jan-29	12000
				Total	169700	Total	5000
				Balance	164700
Bank Loan	Paid Up Capital
		Jan-27	63000			Bal	7300
Total	0	Total	63000			Jan-26	85000
		Balance	63000	Total	0	Total	92300
						Balance	92300

Liabilities
Accounts Payable	11500
Debt	2900
Bank Loan	63000
Other Liabilities	800
Total Liabilities	78200

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