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1.Tom started his business by issuing $2,000 of common stock on January 1, 2011. Tom performed $8,000 of service on account in 2011, and he collected $6,000 of this amount by year-end. He paid operating expenses of $4,500 and paid a $500 dividend to the stockholders. What is the amount of total assets at the end of 2011? a. $5,500 b. $6,000 c. $10,000 d. $5,000
2.Silicon Valley Company issued $5,000 common stock on January 1, 2018. During the year, the company earned $8,500 of revenue on account. The company collected $6,000 cash from accounts receivable and paid $5,400 cash for operating expenses. Identify the effect of these accounting events on the total assets of the company. a. Total assets did not change. b. Total assets increased by $14,100. c. Total assets increased by $600. d. Total assets increased by $8,100.
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2.Increase in Cash ($5,000+6,000-$5,400) = $5,600
Increase in accounts receivable ($8,500-$6,000) = $2,500
Total increase in assets ($5,600+$2,500 = $8,100
Answer is D. Total assets increased by $8,100
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