A Shareholder Invested $75,000, Made Up of $50,000 in Cash

question 59

Multiple Choice

A shareholder invested $75,000, made up of $50,000 in cash and a vehicle worth $25,000, in a new company and received shares in exchange.What is the effect of this transaction on the accounting equation?

• A)Assets increases by $75,000 and owners' equity increases by $75,000.
• B)Assets increases by $75,000 owners' equity increases by $50,000, and liabilities increases by $25,000.
• C)Assets increases by $50,000 and owners' equity increases by $50,000.
• D)Assets increases by $50,000 and liabilities increases by $50,000.

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