The Greenwood Company purchased equipment costing $700. Greenwood paid $400 in cash and agreed to pay the remaining amount in thirty days. As a result of this transaction: a) total assets increased by $700. b) liabilities increased by $300. c) total assets increased by $300. d) both B. and C.
My thought is that the answer would be c) total assets increased by $300. Reasoning is that the $400 cash spent was offset by the $400 equity in the equipment and since the company had possession of the rest of the $300 of the equipment and the remaining cost would not be counted until it was paid.