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    Tammijones's Avatar
    Tammijones Posts: 12, Reputation: 1
    New Member
    		  
    #1

    Sep 24, 2008, 10:56 AM
    Financial Statement
    The Crab Company purchased land costing $2,400 cash. THe company earned $2,000 revenue on account and incurred $1,100 operation expenses on account. As a result of these transactions:
    - total assests increased by $2,400
    - liabilities increased by $1,100
    - total assets increased by $5,400
    - both a and b
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
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    #2

    Sep 24, 2008, 11:24 AM

    Your liabilities increased by $1,100. Your net change in assets is $2,000 as land purchased for cash is a wash as far as change in assets.
    tlarocca's Avatar
    tlarocca Posts: 17, Reputation: 1
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    #3

    Sep 26, 2008, 06:41 AM

    Total liabilities increased by $1100.
    The increase in Land asset was offset by the decrease in cash to purchase the land, therefore no change in assets.
    Total assets actually increased by $2000, in Accounts Receivable due to the $2000 revenue on account.
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