Bledsoe Company received $31,000 cash from the issue of stock on January 1, Year 1. During Year 1, Bledsoe earned $10,100 of revenue on account. The company collected $9,200 cash from accounts receivable and paid $7,000 cash for operating expenses. Based on this information alone, during Year 1, which of the following statements is true?
A) Total assets increased by $43,300.
B) Total assets increased by $2,200.
C) Total assets increased by $34,100.
D) Total assets did not change.

Question

Quizplus · Accepted Answer

The $31,000 in cash received from the issuance of stock would increase the cash account, which would increase total assets by $31,000. The $10,100 in revenue earned on account would increase the accounts receivable account and thus increase total assets by $10,100. The $9,200 collected from accounts receivable would decrease the accounts receivable account and increase the cash account, resulting in no change to total assets. The $7,000 paid for operating expenses would decrease the cash account and decrease total assets by $7,000. Therefore, the net increase in total assets would be $31,000 + $10,100 - $7,000 = $34,100.

Bledsoe Company Received $31,000 Cash from the Issue of Stock