Question

Montego Company’s Cash account had a balance of $14,000 on January 1. Analysis of the company’s Cash account during the year revealed the following information: Receipts from customers $ 50,000 Payments for dividends 10,000 Receipts of dividends 5,000 Payments for merchandise 25,000 Receipts from issuance of stock 20,000 On December 31, the company’s Cash account had a balance of ____.

Answer 1

Answer:

ending cash balance                      54,000

Explanation:

receipts from customer      50,000

payment for merchandise (25,000)

generated from operating activities 25,000

receipts of dividends 5,000

generated from investing activities 5,000

issuance of stock             20,000

payment for dividends     (10,000)

generated from financing activities 10,000

cash generated for the cash          40,000

beginning cash balance                 14, 000

ending cash balance                      54,000

Answer 2

Answer:

$54,000

Explanation:

The computation of the ending cash balance is shown below:

= Beginning cash balance + cash receipts - cash payments

where,

Beginning cash balance is $14,000

Cash receipts would be

= Receipts from customers + Receipts of dividends + Receipts from issuance of stock

= $50,000 + $5,000 + $20,000

= $75,000

And, the cash payment is

= Payments for dividends + Payments for merchandise

= $10,000 + $25,000

= $35,000

So, the ending cash balance would be

= $14,000 + $75,000 - $35,000

= $54,000