Reference no: EM132428824

Question - January 1 Corp received $1,000,000 in cash in exchange for stock issued

Jan 3 borrowed $250,000 from the bank 4 year interest at 12% beginning in year 2

Jan 5 Corp purchased equipment to be used in the business for $200,000

Jan 8 Corp purchased inventory costing $200,000 by paying $120,000 in cash, the remainder was put on credit accounts with suppliers

Jan 15 Corp hired five employees costing $2000.000 each employee will be paid $1000 at the end of each month

Jan 30 Corp paid $6,000 cash for one-year insurance policy, the policy period will begin of Feb 1 year 1.

What will the impact of the Jan 8 event on the company's balance sheet on that date?

A. Inventory will increase $120,000, and cash will decrease $120,000

B. Inventory will increase $200,000, cash will decrease $120,000, and accounts receivable will increase $80,000

C. Inventory will increase $200,000, cash will decrease $120,000, and accounts payable will increase $80,000

D. Inventory will increase $200,000, cash will decrease $120,000, and accounts payable will decrease $80,000.