[Tammijones]

During 2005, the Marlin Company earned $3,700 of cash revenue, paid cash dividends of $750 to owners and paid $930 for cash expenses. Which of the following accurately describes the total effect of these events on the elements of the companys financial statement?
- Assets would increase by $3,700
- Equity would increase by $1,680
- Assets would increase by $2,020
- Equity would increase by $2,770

[AdamUTsel]

Your JE's from the scenario are:

Dr. Cash 3700
Cr. Revenue 3700

Dr. Dividends paid 750
Cr. Cash 750

Dr. Expenses 930
Cr. Cash 930

From here, you can infer your asset balance would increase $2,020 (=3700-750-930).

[tlarocca]

Assets(CASH) would increase by $2020, since we have a cash sale, cash expense and a cash dividend payment.

Equity would increase by the same amount since equity increases by the net sale and is decreased by a dividend paid.

Hope this helps!