Chadwick Associates retained $850,000 of net income in the business in Year 1. If $75,000 was appropriated to satisfy the restrictive covenant of a loan agreement, what are the financial statements effects of the appropriation? Assets=Liab.+EquityRev.?Exp.=Net Inc.Cash flowA.NA=NA+NANA?NA=NANAB.(75,000)=NA+(75,000)NA?NA=NA(75,000) FAC.(75,000)=NA+(75,000)NA?75,000=(75,000)(75,000) FAD.(75,000)=NA+(75,000)NA?NA=NANA
A. Choice A
B. Choice B
C. Choice C
D. Choice D
Answer: A
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