Answer:
The company's Cash account had a balance of <u>$54,000</u> on December 31.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the questions as follows:
Company's cash account had balance of 14000 on January 1
Receipts from customers- 50,000
payments for dividends- 10,000
receipts for dividends- 5,000
payments for merchandise- 25,000
receipts from issuance of stock- 20,000
On December 31, the company's cash balance is?
A 40,000
B 54,000
C 110,000
D 124,000
The explanation of the answer to the question is now given as follows:
the company's Cash account balance On December 31 can be obtained by simply adding the total cash receipts to and deducting the total cash payments from the Company's cash account balance of 14000 on January 1. This can be expressed as follows:
Cash balance on December 31 = Cash account balance on January 1 + Total cash receipts - Total cash payments .............. (1)
Where we have:
a. Cash account balance on January 1 = $14,000
b. Calculation Total cash receipts
Details $
Receipts from customers 50,000
receipts for dividends- 5,000
receipts from issuance of stock <u> 20,000 </u>
Total cash receipts <u> 75,000 </u>
c. Calculation Total cash payments
Details $
Payments for dividends 10,000
payments for merchandise <u> 25,000 </u>
Total cash payments <u> 35,000 </u>
Substituting the values into equation (1), we have:
Cash balance on December 31 = $14,000 + $75,000 - $35,000 = $54,000
Therefore, the company's Cash account had a balance of <u>$54,000</u> on December 31.
