Question

Jim Tree has $3,300 in cash and $3,300 in owner's equity. After several transactions, what will be the updated balance sheet?

a. Cash $2,665, Accounts Payable $2,665, Equipment $0.00
b. Cash $2,665, Accounts Payable $3,300, Equipment $0.00
c. Cash $2,665, Accounts Payable $0.00, Equipment $3,300
d. Cash $3,300, Accounts Payable $2,665, Equipment $0.00

Answer 1

It's not possible to accurately update Jim Tree's balance sheet without specific details about the transactions he conducted. The initial balance sheet had $3,300 in cash and owner's equity, but the options provided do not align with this starting point, and none appears to maintain the total value of assets and liabilities plus equity.

Step-by-step explanation:

The question is about understanding how a balance sheet is updated after business transactions. Initially, Jim Tree has $3,300 in cash and $3,300 in owner's equity. If we consider that Jim has made transactions that affected his cash and potentially added other elements such as assets or liabilities, we would need to know the specifics of the transactions to determine the exact changes to the balance sheet. However, given the options provided, none shows a scenario where the cash and owner's equity are consistent with the initial values given.

Without additional information about the transactions, it isn't possible to determine the updated balance sheet accurately. Each balance sheet entry should reflect the outcome of a business transaction. For example, purchasing equipment would decrease cash and increase assets. Borrowing money would increase cash and also increase a liability such as accounts payable.