Your firm has a beginning balance of $8,000 cash, $2,000 inventory, an

Your firm has a beginning balance of $8,000 cash, $2,000 inventory, and $10,000 initial equity. Your firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it.

If this is your only transaction, your resulting balance sheet should most closely resemble which of the following choices?
A) Cash = $8,000, accounts receivable = $3,000, inventory = $1,000, initial equity = $10,000, and retained earnings = $2,000
B) Cash = $11,000, inventory = $1,000. initial equity = $10,000, and retained earnings = $2,000
C) Cash $11,000, inventory = $2,000, initial equity $10,000, and retained earnings $3,000
D) Cash $11,000, inventory = $2,000, and initial equity = $13,000

ANSWER

B