Question

Also tell me if it’s increased or decreased,

Thanks

$19,564 of and the r and decrease Babilities by

Answer 1

In the given question Simpson auto body repair purchase a machinery(asset) worth $19,564 by paying cash $4,402 and remaining in four monthly installments.

case 1: @ the time of purchase

• purchase of machinery increases assets by $19,564
• Payment of cash decreases asset by $4,402
• Remaining liability of installments $15,162(19,564-4,402) increases liability

Therefore,

• there was an increase in assets by $15,162 and
• increase in liability by $15,162

​​​​​​case 2: @ payment of first monthly installment

payment of installment reduces cash( asset)by amount paid and reduces the liabilitiy by installment paid.

• Therefore, on payment of installment asset (cash) decreases and
• Decrease in liability as the due installment was paid.

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