Jaycox Company received $1,000 cash from the issue of stock on January 1,2012.During 2012 the Jaycox Company earned $3,500 of revenue on account.The company collected $2,400 cash from accounts receivable and paid $3,000 cash for operating expenses.Based on this information alone:
A) total assets increased by $1,500.
B) total assets decreased by $3,500.
C) total assets increased by $2,400.
D) total assets did not change.

Question

Quizplus · Accepted Answer

The initial cash from stock issuance increases assets by $1,000. Revenue earned on account increases accounts receivable by $3,500. Collecting $2,400 reduces accounts receivable but increases cash, so no net change. Paying $3,000 in expenses decreases cash. Net change in assets: $1,000 (stock) + $3,500 (revenue) - $3,000 (expenses) = $1,500 increase.

Jaycox Company Received $1,000 Cash from the Issue of Stock