In January, X Company purchased some equipment with $100,000 that it borrowed from a local bank. The accountant recorded the transaction as an increase in Inventories and an increase in Accounts Payable. As a result, on the January balance sheet, Inventories were overstated. Accounts Payable was understated. Cash was understated. Total liabilities were understated. Total assets were understated. Retained Earnings was overstated.