Question

ABC Inc. has $100 in cash on its balance sheet at the end of 2017. During 2018, the firm issued $450 in common stock, reduced its notes payable by $40, purchased fixed assets in the amount of $750, and had cash flows from operating activities of $315. How much cash did ABC Inc. have on its balance sheet at the end of 2018?

Answer 1

Answer:

$75

Explanation:

The following operations represent an increase in cash on the balance sheet: issuing common stock and cash flows from operating activities.

The following operations represent a decrease in cash on the balance sheet: reducing notes payable and purchasing fixed assets.

Since the initial balance was $100, the balance at the end of 2018 is:

$B=\ 100+\ 450+\ 315-\ 40-\ 750\\B=\ 75$

ABC Inc. has $75 on its balance sheet at the end of 2018.