You run a profitable retail shop.

You'll pay 30% corporate tax on profits in a few months.

It's the last day of the financial year.

You stock inventory that cost you $50 each, and you just sold one to a customer for $150 cash.

You're thinking through how this $150 cash transaction will affect your company's financial statements. Ignore GST.

Which of the following effects on the profit and loss (P&L), balance sheet and cash flow statement is NOT correct?

Select one:

a.

$150 higher revenue, $50 higher COGS, $30 higher tax expense, resulting in $70 higher profit on the P&L and $70 higher retained profits on the balance sheet.

b.

$150 higher cash asset on the balance sheet.

c.

$50 lower inventory asset on the balance sheet.

d.

$30 higher tax payable liability on the balance sheet.

e.

$70 higher operating cash flow on the cash flow statement.