Question

Determine the amount to post to the Cash T-account. Event Debit/Credit Purchase equipment by signing a note with the bank for $20,000. Provide services to customers for $26,000 cash. Pay utilities of $2,000 for the current month. Pay back bank note of $20,000. Purchase supplies for $700 cash.
a. Assuming the beginning balance in the Cash T-account is $0, what is the ending balance in the Cash T-account after the five transactions above?
b. Instead of a beginning balance of $0, what if the beginning balance in the Cash T-account was $3,000. Now, what is the ending balance in the Cash T-account after the five transactions above?

Answer 1

Answer:

(A) Ending Balance is $ 3,300

(B) Ending Balance is $6,300

Explanation:

(A)  Ending Balance :

                                                     $

Opening Balance                         0

Inflow from Bank Loan             20,000

Purchase equipment               (20,000)

Cash Receipt from customer  26,000

Utilities payment                       ( 2,000)

Bank loan repayment               (20,000)

Supplies purchased                 (     700)

Cash closing Balance               3,300  

(B)

Opening Balance                       3,000

Inflow from Bank Loan             20,000

Purchase equipment               (20,000)

Cash Receipt from customer  26,000

Utilities payment                       ( 2,000)

Bank loan repayment               (20,000)

Supplies purchased                 (     700)

Cash closing Balance               6,300