Respuesta :
Assets will be increased by $40,000 If a company issues common stock and uses $30,000 of the cash to purchase a truck.
One of the most popular ways to raise money or cash for a company's business activities is through the issuance of common stock. In exchange for assets to be received, the firm in this transaction grants the company a certain proportion of ownership.
Both Cash and Truck are asset accounts that are impacted by debits and credits. Due to the debit in cash in the first transaction, the asset will increase by $40,000 as a result. Due to the debit and credit on assets being for the same amount, the second transaction will not affect total assets. As a result, the trades will cause an asset rise of $40,000 in total.
An equity account that has received credits is called common stock. The first transaction will result in a $40k raise in overall equity. The equity is unaffected by the second transaction.
To know about the issuance of common stock: https://brainly.com/question/28592194
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The correct question is:
If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,
a. assets will be increased by $10,000.
b. equity will be reduced by $40,000.
c. assets will be increased by $40,000.
d. assets will be unchanged.
