Question

Mize Company provided $45,500 of services on account, and collected $38,000 from customers during the year. The company also incurred $37,000 of expenses on account, and paid $32,400 against its payables. How do these events impact the elements of the horizontal financial statements model

Answer 1

Total asset will increase

Step-by-step explanation:

Equity and Liability Amount Effect

Service Revenue $45,500

Expenses $37,000

Profit $8,500 Increase in equity

Account Payable $4,000 Increase in liability

($37,000 - $32,400)

Total $13,100 Increase in Total assets

Asset

Cash $5,600

($38,000 - $32,400)

Account Receivables $7,500

($45,500 - $38,000)

Total $13,100 Increase in Total assets