Question

Foster, Inc., purchased a truck by paying $5,000 and borrowing the remaining $30,000 required to complete the transaction. Identify the correct statement(s) based on the transaction. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

The Company's liabilities will increase by $25,000. ?
The Company's liabilities will decrease by $30,000.
2 Foster Inc.'s assets will decrease by a net amount of $30,000. The Company's liabilities will increase by $30,000. ?
Foster Inc.'s assets will increase by a net amount of $30,000. ?
Foster Inc.'s assets will decrease by a net amount of $25,000.

Answer 1

Foster Inc.'s assets will decrease by a net amount of $30,000.

The Company's liabilities will increase by $30,000.

Step-by-step explanation:

The price of the assert is $5,000 + $30,000 = $35,000

this means that the company's fixed assets will increase by $35,000, but since cash is decreasing by $5,000, the net change will be only $30,000

the amount of the loan = $30,000

this means that the company's liabilities will increase by $30,000