Question

Analysis reveals that a company had a net decrease in cash of $4,000 for the current year. Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the year-end cash balance is $21,000, the beginning cash balance was:

Answer 1

Answer:

The beginning cash balance was $25,000

Explanation:

For computing the beginning cash balance, we have to do the following calculations which are shown below:

Since the net decrease in cash is given in the question, and the year-end balance is given so we can compute the beginning cash balance easily

= Net decrease in cash + Year-end cash balance

= $4000 + $21,000

= $25,000

The other information is given for computing the increase or decrease in cash balance but it is already given in the question. So, this information is of no use. Thus, we ignored it.

Hence,  the beginning cash balance was $25,000