A business commenced with capital in cash of $1,000. Inventory costing $800 net of sales tax is
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Question:
A business commenced with capital in cash of $1,000. Inventory costing $800 net of sales tax is purchased on credit. Half of this inventory is then sold for $1,000 plus sales tax, the customer paying in cash at once.
The accounting equation after these transactions would show:
A. assets $1,775 less liabilities $175 equals capital $1,600
B. assets $2,775 less liabilities $975 equals capital $1,200
C. assets $2,575 less liabilities $800 equals capital $1,775
D. assets $2,575 less liabilities $975 equals capital $1,600
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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