The Kenton Corp. began business this year. In addition to the $665,000 invested by its shareholders Kenton borrowed $235,000 from the bank. Kenton then purchased a new office building for $350,000. Of this purchase price $125,000 was paid using the cash received from the shareholders and the remaining amount was financed by a trust company. What is the amount of shareholders equity to be reported on the balance sheet

$665,000

$775,000

$315,000

$540,000

On September 30, 2015, Alcor, Inc. received a bill for $5,000 for running a newspaper ad in September. The bill will be paid in October. Which of the following statements is correct?

liabilities are increased by $5,000 in October

assets are decreased by $5,000 in September

net income is decreased by $5,000 in October

net income is increased by $5,000 in October