Delta Company purchased a delivery truck for a total cost of $15,000. Delta paid $2,000 in cash and signed a note payable for the remainder. The total effect of this transaction on the accounting equation was to:

Question

Business

Randall Sutton

7 September, 19:50

Delta Company purchased a delivery truck for a total cost of $15,000. Delta paid $2,000 in cash and signed a note payable for the remainder. The total effect of this transaction on the accounting equation was to:

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Answers (1)

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Lady · Answer 1

increase assets by $13,000, increase liabilities by $13,000 and have no effect on equity.

Explanation:

Given that

The total cost of purchase of delivery truck = $15,000

Cash paid = $2,000

The accounting equation equals to

Total assets = Total liabilities + owners equity

The remaining amount left would be equal to

= $15,000 - $2,000

= $13,000

So it would increase the assets for $13,000 as the delivery truck is purchased plus there is also an increase in liabilities for $13,000 as it signed a note payable and there is no effect on equity