The following is the balance sheet of Columbus Corporation immediately prior to deciding how to finance the purchase of an additional $200,000 parcel of land. Answer the question that follows. REQUIRED: Columbus will finance the $200,000 investment in land by issuing either $200,000 of common stock or using $200,000 of additional accounts payable that will be due in 90 days. Indicate which method of financing is preferable for Columbus. Consider the effects on short-term solvency positions.

Question

The following is the balance sheet of Columbus Corporation immediately prior to deciding how to finance the purchase of an additional $200,000 parcel of land. Answer the question that follows.  REQUIRED: Columbus will finance the $200,000 investment in land by issuing either $200,000 of common stock or using $200,000 of additional accounts payable that will be due in 90 days. Indicate which method of financing is preferable for Columbus. Consider the effects on short-term solvency positions.

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The Answer of The following is the balance sheet of Columbus Corporation immediately prior to deciding how to finance the purchase of an additional $200,000 parcel of land. Answer the question that follows.  REQUIRED: Columbus will finance the $200,000 investment in land by issuing either $200,000 of common stock or using $200,000 of additional accounts payable that will be due in 90 days. Indicate which method of financing is preferable for Columbus. Consider the effects on short-term solvency positions.

The Following Is the Balance Sheet of Columbus Corporation Immediately