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, Total assets were understated. Accounts Payable was understated. Retained Earnings was overstated. Inventories were overstated. Cash was understated. Total liabilities were understated.