Question

As of December 31, Year 1, Mason Company had $500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. The amount of cash shown on the balance sheet at the end of Year 2 would be: Multiple Choice O $90 o $400. $1,700 $2.500

Answer 1

Answer:

The balance sheet will show a cash balance of 900 dollars.

Explanation:

We do the cash T account to solve for this. As it resumes all the transactions for the given period of time and can be used to determinate the balance.

           CASH

  DEBIT        CREDIT  

    500

   1,200

                        800    

  1,700              800

Balance: 900

We post the inflow in the debit side while the outflow (expenses paid) in the credit side.

Then we subtract one from another and get the balance which is always on debit.