Assume that Blitzkrieg Realty Co. borrowed $25,000 from First Union Bank and Trust. In recording the transaction, Blitzkrieg erroneously recorded the receipt of $25,000 as a debit to cash, $25,000, and a credit to fees earned, $25,000.
(a) How would this error affect the equality of the trial balance?
(b) How would this error affect the income statement, statement of owner's equity, and balance sheet?