Option (ii)
Let's analyze each transaction step by step:
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Paid a note payable $35,000 (no interest was paid): This reduces both assets (cash) and liabilities (note payable) by $35,000. Assets: $350,000 - $35,000 = $315,000 Liabilities: $X - $35,000 = $X - $35,000
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Collected an Accounts receivable, $45,000: This increases cash and reduces an asset (accounts receivable). Assets: $315,000 + $45,000 = $360,000 Liabilities remain the same: $X - $35,000
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Paid an Accounts payable, $33,000: This reduces cash and liabilities (accounts payable). Assets: $360,000 - $33,000 = $327,000 Liabilities: $X - $35,000 - $33,000 = $X - $68,000
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Purchased a truck for $37,500 financed by cash $7,500 and a Motor Vehicle Loan $30,000: This reduces cash by $7,500 and increases
