Question

During the past year, Arnold Inc.'s comparative balance sheet reported an increase in overall stockholders' equity of $43,500, a decrease in total liabilities of $17,200, and an increase in assets other than cash of $12,000. Consequently, Arnold, Inc. reported a(n) __________ in cash of ____________.

Answer 1

Answer:

increase in cash of $14,300

Explanation:

The question is related to basic accounting equation:

Assets = Liabilities + Owner's Equity

Since we have to find increase or decrease in cash, we will break up Assets into two parts that are Other Assets and Cash.

Now the equation would look like this:

Other Assets + Cash = Liabilities + Owner's Equity

$12,000 + Cash             = -$17,200 + $43,500

Cash                            = - $17,200 + $43,500 - $12000

Cash                            = $14,300

Notable points: Increase in Other Assets is shown by +$12,000

                          Decrease in Liabilities is shown by -$17,200

                          Increase in Owner's Equity is shown by +$43,500

                          End result is +$14,200 showing increase in Cash