You are the bookkeeper for Harley Inc., a newly formed corporation. Harley had the following transactions for their business: * Four shareholders contributed $40,000 ($10,000 each) in exchange for Harley common stock. * Harley purchased inventory for $5,000. Harley received an invoice for the inventory that is due in 30 days. What are the effects on Harley's accounting equation? A B D Based on the two transactions, Assets increased by $40,000, Liabilities decreased by $5,000 and Shareholder Equity increased by $45,000. Based on the two transactions, Assets increased by $45,000, Liabilities increased by $5,000 and Shareholder Equity increased by $40,000. C Based on the two transactions, Assets increased by $15,000, Liabilities increased by $5,000 and Shareholder Equity increased by $10,000. Based on the two transactions, Assets increased by $35,000, Liabilities decreased by $5,000 and Shareholder Equity increased by $40,000.
You are the bookkeeper for Harley Inc., a newly formed corporation. Harley had the following transactions for their business: * Four shareholders contributed $40,000 ($10,000 each) in exchange for Harley common stock. * Harley purchased inventory for $5,000. Harley received an invoice for the inventory that is due in 30 days. What are the effects on Harley's accounting equation? A B D Based on the two transactions, Assets increased by $40,000, Liabilities decreased by $5,000 and Shareholder Equity increased by $45,000. Based on the two transactions, Assets increased by $45,000, Liabilities increased by $5,000 and Shareholder Equity increased by $40,000. C Based on the two transactions, Assets increased by $15,000, Liabilities increased by $5,000 and Shareholder Equity increased by $10,000. Based on the two transactions, Assets increased by $35,000, Liabilities decreased by $5,000 and Shareholder Equity increased by $40,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![You are the bookkeeper for Harley Inc., a newly formed corporation. Harley had the following
transactions for their business:
* Four shareholders contributed $40,000 ($10,000 each) in exchange for Harley common stock.
* Harley purchased inventory for $5,000. Harley received an invoice for the inventory that is due
in 30 days.
What are the effects on Harley's accounting equation?
A
B
D
Based on the two transactions, Assets increased by $40,000, Liabilities decreased by $5,000 and Shareholder Equity
increased by $45,000.
Based on the two transactions, Assets increased by $45,000, Liabilities increased by $5,000 and Shareholder Equity
increased by $40,000.
C Based on the two transactions, Assets increased by $15,000, Liabilities increased by $5,000 and Shareholder Equity
increased by $10,000.
Based on the two transactions, Assets increased by $35,000, Liabilities decreased by $5,000 and Shareholder Equity
increased by $40,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5fd1abf0-a574-481c-ac15-4b29b61bcbad%2Fdfe32398-40e7-4258-bef3-7c23c69398fe%2Fh7ms79a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You are the bookkeeper for Harley Inc., a newly formed corporation. Harley had the following
transactions for their business:
* Four shareholders contributed $40,000 ($10,000 each) in exchange for Harley common stock.
* Harley purchased inventory for $5,000. Harley received an invoice for the inventory that is due
in 30 days.
What are the effects on Harley's accounting equation?
A
B
D
Based on the two transactions, Assets increased by $40,000, Liabilities decreased by $5,000 and Shareholder Equity
increased by $45,000.
Based on the two transactions, Assets increased by $45,000, Liabilities increased by $5,000 and Shareholder Equity
increased by $40,000.
C Based on the two transactions, Assets increased by $15,000, Liabilities increased by $5,000 and Shareholder Equity
increased by $10,000.
Based on the two transactions, Assets increased by $35,000, Liabilities decreased by $5,000 and Shareholder Equity
increased by $40,000.
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