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in the atatched question, it has been asked to judge the impact on cash.
1. Other Assets decrease by $200,000
When other asset decrease due to decrease in Accounts receivable = Cash will increase
When other asset decrease due to let`s say disposing asset to settle liabilities = Cash will not move.
2. Liabilities increase by $300,000
When Liability increase due to new debenture issue = Cash increase
When liability increase beacuse of good purchased on credit ( Account payble ) = NO IMPACT on Cash
3. Equity increases by $400,000
I can create similar case for equity .
I am happy to be corrected. Please help.
1. Other Assets decrease by $200,000
When other asset decrease due to decrease in Accounts receivable = Cash will increase
When other asset decrease due to let`s say disposing asset to settle liabilities = Cash will not move.
2. Liabilities increase by $300,000
When Liability increase due to new debenture issue = Cash increase
When liability increase beacuse of good purchased on credit ( Account payble ) = NO IMPACT on Cash
3. Equity increases by $400,000
I can create similar case for equity .
I am happy to be corrected. Please help.
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