Assume that a customer purchases groceries and cleaning supplies with a total price of $$500.$ The inventoried cost for the groceries and cleaning products is $72\%$ of the sales price. How does this transaction effect the accounting equation? Consider both the sale and the reduction in inventory. The customer paid cash.

$1)$

Sales increase by $$500,$ Cost of Sales increases by $$360$ and Equity increases by $$140.$ There is no change in current assets.

$2)$

Current Assets increase by $$140$ and Equity increases by $$140.$

$3)$

Cash increases by $$500,$ liabilities decrease by $$360,$ Sales increases by $$500$ and cost of sales increases by $$360.$

$4)$

Cash increases by $$500$ and inventory decreases by $$360$ and sales increases by $$140.$