Health Care Finance
10. Consider the following balance sheet: Cash $ 70,000Accounts payable $ 30,000 Accounts receivable 30,000Long-term debt 20,000 Inventories 50,000Common stock 200,000 Net fixed assets 350,000Retained earnings 250,000 Total assets $500,000Total claims $500,000 Assume that the business uses $10,000 of its cash to pay for supplies that were ordered on credit terms and have already been received and booked (recorded on the balance sheet). Which of the below statements reflects the resulting balance sheet change?
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a. There is a change to the left-hand side only. b. There is a change to the right-hand side only. c. The cash account decreases by $10,000 and the retained earnings account decreases by $10,000. d. The cash account decreases by $10,000 and the accounts payable account decreases by $10,000. e. The cash account decreases by $10,000 and the supplies account increases by $10,000