1-

Green Door Boutique is famous for fashion wristwatches and leather purses. At the end of a recent year, Green Door had Equipment with a Net Book Value of $215,000; A Loan for part of this asset for $105,000; Receivables of $85,000; Payables of $45,000 and money in the bank amounting to $25,000. What is the amount of Green Doors equity?

Select one:

a. $220,000

b. None of the answers provided are correct

c. $175,000

d. $135,000

2-

Assume that GreY Door Boutique bought additional watches from a credit supplier on account for $95,000. How would this transaction affect Blue Doors accounting equation?

Select one:

a. Increase liabilities and decrease equity by $95,000

b. No effect on the accounting equation because the effects cancel out

c. Increase both liabilities and equity by $75,000

d. Increase equity and decrease liabilities by $95,000

3-

If a business pays $64,000 cash for Marketing Expenses, which of these statements is/are correct for the correct journal double entry?

I Debit Cash A/c with $64,000

II Credit Marketing Expenses A/c with $64,000

Select one:

a. Both (I) and (II) are incorrect

b. Both (I) and (II) are correct

c. Only I is correct

d. Only II is correct