Our 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 $$3,719,171$ at $14\mathrm{.}19\%$ interest. The second was using equily that amounted to $$26,631,000.$

Assuming a straight line depreciation of $15$ years, I would wike to verity which of the effects shown below directly resulfed from this transaction? l$\text{'}$m confident two are correct

but inl let you sort out which ones those are.

Sincerely,

Samantha

Samantha Jorgenson

Board Member, Accounting $8$ Finance $|$ Andrews Corporation

Choose all responses that apply.

Cash went up by $$22,912,000$ when the plant was purchased.

On the Balance sheet, Plant and Equipment increased by $$22,912,000$

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

On the Balance sheet, Retained Earnings decreased by $$26,631,000.$

Cash was drawn from retained eamings to cover the $$26,631,000$ difference between the plant purchase and bond issue.

Cash went up when the Bond was issued by $$3,719,171$