Bledsoe Company received $17,000 cash from the issue of stock on January 1, Year 1. During Year 1, Bledsoe earned $8,500 of revenue on account. The company collected $6,000 cash from accounts receivable and paid $5,400 cash for operating expenses. Based on this information alone, during Year 1, which of the following statements is true?
A) Total assets increased by $20,100.
B) Total assets increased by $600.
C) Total assets increased by $26,100.
D) Total assets did not change.

Question

Quizplus · Accepted Answer

Total assets increased by $17,000 (cash from the issue of stock) + $8,500 (revenue on account, increasing accounts receivable) - $5,400 (cash paid for expenses) = $20,100. Cash collections from accounts receivable do not affect total assets, as they merely shift the composition from accounts receivable to cash.

Bledsoe Company Received $17,000 Cash from the Issue of Stock