on january 1, year 2, chavez company has beginning balances as follows Conect e

Question

on january 1, year 2, chavez company has beginning balances as follows Conect e Final Exam G Help Save&i; During the year, Milstone Company earned $6,500 of cash revenue, paid cash dividends of $1000 to owners and paid $4,000 for cash expenses Liabilities were unchanged. Which of the following accuretely describes the effect of these events on the elements of the company's financial Multiple Choice Assets increased by $5.500 Equity increased by $2.50o Assets incressed by S1500 Assets increased by $6.0O Prex 29 of 60 Next > MacBook Air ?? 0

Explanation / Answer

Solution:

c. Assets increased by $1500

Explanation:

Cash Received From Sales Revenue...................... $6000

Less: Dividend Paid in Cash.....................................$1000

Less: Other Expenses Paid in Cash.........................$4000

Cash Balance Available after Expenses,,,,,,,,,,,,,,,,,,,$1500

Since Cash in Hand/Cash & Cash Equivalent is a Balance Sheet item which hits Asset only, so Asset will increase by $1500 and rest will remain intact.

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