a new retail business has sales of 100 000 cost of goods sold of 35 000 salaries of 591958

A new retail business has sales of $100,000, cost of goods sold of $35,000, salaries of $15,000, rental of $4,000, and advertising of $8,000. All of the income and expenses have been paid out of the owner’s initial capital of $25,000. In addition, the business paid cash of $30,000 for inventory (which remains unsold) and purchased equipment on credit for $20,000. The financial statements of the business would show
a. Profit of $38,000, cash of $13,000, and shareholders’ equity of $25,000
b. Profit of $38,000, cash of $33,000, and shareholders’ equity of $63,000
c. Profit of $65,000, cash of $3,000, and shareholders’ equity of $38,000
d. Profit of $63,000, cash of $33,000, and shareholders’ equity of $38,000