Orlando Company paid $700 cash for production workers' wages.How does this transaction affect the financial statements? $\begin{array}{|c|c|c|c|c|c|c|c|c|c|}
\hline {\text { Assets }} & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \begin{array}{l|c|l}
\text { Cash } & + & \text { WIP Inv. } \

\end{array} & & & & & & & & & \
\hline
\end{array}$

Question

Orlando Company paid $700 cash for production workers' wages.How does this transaction affect the financial statements? $\begin{array}{|c|c|c|c|c|c|c|c|c|c|}
\hline {\text { Assets }} & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \begin{array}{l|c|l}
\text { Cash } & + & \text { WIP Inv. } \

\end{array} & & & & & & & & & \
\hline
\end{array}$

Quizplus · Accepted Answer

The cash payment decreases assets (cash) by $700 and increases assets (WIP Inventory) by $700, with no effect on liabilities, equity, revenue, expenses, or net income.

Orlando Company Paid $700 Cash for Production Workers' Wages A) (700)+700=NA+NANA−NA=NA\begin{array}{|c|c|c|c|c|c|c|c|c|c|c|c|}\hline (700)&+&700&=&NA&+&NA&NA&-&NA&=&NA\\\hline\end{array}(700)​+​700​=​NA​+​NA​NA​−​NA​=​NA​​

Orlando Company Paid $700 Cash for Production Workers' Wages A) $\begin{array}{|c|c|c|c|c|c|c|c|c|c|c|c|}\hline (700)&+&700&=&NA&+&NA&NA&-&NA&=&NA\\\hline\end{array}$