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Sagot :
Increase in retained Earnings for $250 Suppose Marvin Inc. charges $250 for goods that it originally sold for $150. how these transactions as a whole will affect the extended accounting equation.
Marvin Inc. sells goods to customers for $250 that initially cost $150 in the scenario above.
In general, as a company generates revenue, current assets (such as cash and accounts receivable) rise together with the retained earnings portion of stockholders' equity.
Due to this rise in assets, the stockholders' equity portion of the balance sheet will also rise, which will result in an increase in retained earnings.
As a result, the impact of revenue on the balance sheet is a rise in an asset account and a corresponding rise in an equity account.
The preceding query,
Given that the $250 in product sales will result in a $250 rise in revenue and current assets.
Accordingly, given the answers above: Increase in retained Earnings for $250
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