Dicks LLC purchases 100000 worth of raw materials on credit

Dick\'s LLC purchases $100,000 worth of raw materials on credit. What changes do you make in the balance sheet? ? Cash-$100,000 Retained earnings +$100,000 O Accounts payable +$100,000 a Inventory +$100,000

Solution

Answer is

Accounts payable +100000

Inventory +100000

Explanation:

The Journal entry for the credit purchase of inventory is as under:

Inventory Account Dr.

Accounts payable Account