During year ending December 31, 2013, HM Inc. sold widgets and billed its customers $500,000. It received cash of $550,000 from customers including $20,000 from accounts receivable from the prior fiscal year. The cost of inventory used for the widgets delivered to customers during the year was $450,000. Which of the following is true with respect to HM Inc. balance sheet as on December 31, 2013 based on data provided?

a.

Cash asset increases by $550,000, Non cash assets decrease by $470,000, Liabilities increase by $30,000

b.

Cash asset increases by $500,000, Non cash assets decrease by $450,000, Earned capital increases by $50,000

c.

Cash asset increases by $550,000, Non cash assets decrease by $450,000, Cost of Goods Sold decreases by $450,000

d.

Cash asset increases by $550,000, Non cash assets decrease by $470,000, and Liabilities decrease by $30,000

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