Bledsoe Company acquired $27,000 cash by issuing common stock on January 1, Year 1. During Year 1, Bledsoe earned $9,700 of revenue on account. The company collected $8,400 cash from customers in partial settlement of its accounts receivable and paid $6,600 cash for operating expenses. Based on this information alone, what was the impact on total assets during Year 1?

Question

Blaze Morris

Business

14 April, 08:58

Bledsoe Company acquired $27,000 cash by issuing common stock on January 1, Year 1. During Year 1, Bledsoe earned $9,700 of revenue on account. The company collected $8,400 cash from customers in partial settlement of its accounts receivable and paid $6,600 cash for operating expenses. Based on this information alone, what was the impact on total assets during Year 1?

+4

Answers (1)

Know the Answer?

Travis Flowers · Answer 1

Net impact on total assets = $30,100 increase.

Explanation:

As for the information provided, we have

Issue of stock in exchange of Cash = $27,000, This will be beginning cash balance which is an asset. Revenue earned for the year = $9,700, This will increase accounts receivables balance. Increase in assets = $9,700 Amount collected from accounts receivables = $8,400, Now this transaction will not impact assets, as cash will increase but accounts receivables will decrease, making a net impact of 0 on assets. Cash paid for operating expenses = $6,600, this will decrease the balance of cash and will accordingly decrease the assets.

Net impact on assets = + $27,000 + $9,700 + $0 - $6,600 = $30,100 Increase.