Glencoe Golf Store purchases merchandise inventory for $152,500 that it then sells on credit at a sales price of $182,500. The amount of cash collected is only $173,000 due to sales returns. What is the net effect of completing this cycle?
1) An increase of $30,000 in both assets and equity
2) An increase of $20,500 in both assets and equity
3) An increase of $30,000 in assets
4) An increase of $20,500 in assets only