1. Issued 10,000 shares of common stock for $15,000 cash. 2. Purchased land for $12,000, signing a note payable for the full amount. 3. Purchased office equipment for $1,200 cash. 4. Received cash of $14,000 for services provided to customers during the month. 5. Purchased $300 of office supplies on account. 6. Paid employees $10,000 for their first month's salaries. What was the total amount of ATI's liabilities followingthese six transactions? A. $12,300. B. $27,300. C. $22,600. D. $15,500.

Question

Business

Frederick Lutz

1 April, 09:48

1. Issued 10,000 shares of common stock for $15,000 cash. 2. Purchased land for $12,000, signing a note payable for the full amount. 3. Purchased office equipment for $1,200 cash. 4. Received cash of $14,000 for services provided to customers during the month. 5. Purchased $300 of office supplies on account. 6. Paid employees $10,000 for their first month's salaries. What was the total amount of ATI's liabilities followingthese six transactions? A. $12,300. B. $27,300. C. $22,600. D. $15,500.

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Answers (1)

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Sellers · Answer 1

Answer: Option (A) is correct.

Explanation:

Given that,

Total amount of ATI's liabilities = Purchased land by signing a note payable + Purchased office supplies on account

= $12,000 + $300

= $12,300

All other transactions are done in terms of cash.

(1) Positive cash balance of $15,000.

(3) Negative cash balance of ($1,200)

(4) Positive cash balance of $14,000.

(6) Negative cash balance of ($10,000)

Whereas transactions (2) and (5) created liability for the ATI.