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23 May, 08:25

Purchasing a building for $ 105 comma 000 by paying cash of $ 25 comma 000 and signing a note payable for $ 80 comma 000 will A. decrease total assets and increase total liabilities by $ 25 comma 000. B. increase both total assets and total liabilities by $ 105 comma 000. C. increase both total assets and total liabilities by $ 80 comma 000. D. decrease both total assets and total liabilities by $ 25 comma 000.

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  1. 23 May, 10:42
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    C. increase both total assets and total liabilities by $ 80,000.

    Explanation:

    Before the purchase:

    Cash $25,000

    Net Actives: $25,000

    After the purchase:

    Buildings $105,000

    Notes Payable $80,000

    Net Actives: $25,000

    The total increase of the total active comes with an increase in the debts too, both in 80,000.
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