Question

Corentine Co. had $169,000 of accounts payable on September 30 and $141,000 on October 31. Total purchases on account during October were $298,000. Determine how much cash was paid on accounts payable during October. On September 30, Valerian Co. had a $111,000 balance in Accounts Receivable. During October, the company collected $111,390 from its credit customers. The October 31 balance in Accounts Receivable was $106,000. Determine the amount of sales on account that occurred in October. During October, Alameda Company had $119,500 of cash receipts and $120,150 of cash disbursements. The October 31 Cash balance was $27,100. Determine how much cash the company had at the close of business on September 30.

Answer 1

Answer and Explanation:

The computation is shown below:

a. For the cash paid

= Opening balance of account payable + total purchase - ending balance

= $169,000 + $298,000 - $141,000

= $326,000

b. The sale amount on account should be equivalent to the ending balance of account receivable i.e. $106,000

c. The beginning cash balance is

Closing cash balance = beginning cash balance + cash receipts - cash disbursements

$27,100 = Beginning cash balance + $119,500 - $120,150

So, the beginning cash balance is $27,750