Ir competitive analysis shows that Digby invested in new production facilities, including plant and equipment last year. It appears that this investment

was funded two ways. The first was with bonds that had a face value of $$4,736,044$ at $13\mathrm{.}54\%$ interest. The second was using equity that amounted to

$$49,310,000.$

Assuming a straight line depreciation of $15$ years, I would like to verify which of the effects shown below directly resulted from this transaction? I$\text{'}$m

confident two are correct but l$\text{'}$ll let you sort out which ones those are.

Sincerely,

Samantha

Samantha Jorgenson

Board Member, Accounting & Finance $|$ Andrews Corporation

Choose all resjonses that apply.

Buying the plant had no net effect on the Cash account.

On the Balance sheet, Plant and Equipment increased by $$44,574,000$

Cash went up when the Bond was issued by $$4,736,044$

On the Balance sheet, Retained Earnings decreased by $$49,310,000.$

Cash was drawn from retained earnings to cover the $$49,310,000$ difference between the plant purchase and bond

issue.

Cash went up by $$44,574,000$ when the plant was purchased.