Question

Lori Nichols opened an engineering office and titled the business Engineering Enterprises P.C. During its first month of operations, it completed the following transactions: Lori invested $30,000 in the business, which in turn issued common stock to her. The business purchased equipment on account for $6,000. The business provided engineering services on account, $10,000. The business paid salaries to the receptionist, $1,000. The business received cash from a customer as payment on account $6,000. The business borrowed $8,000 from the bank, issuing a note payable. At the end of the month, Cash would equal: A) $30,000.B) $37,000.C) $43,000.D) $61,000.

Answer 1

Answer:

Engineering Enterprises P.C.

At the end of the month, Cash would equal:

C) $43,000.

Explanation:

a) Data and Calculations:

Cash Account:

Lori investment in Engineering Enterprises P.C. = $30,000

Payment of salaries to the receptionist =                    (1,000)

Cash received from a customer on account =            6,000

Cash borrowed from the bank =                                  8,000

At the end of the month, Cash would equal          $43,000

b) The cash balance at the end of the month is made up of the investment by Lori for common stock in Engineering Enterprises P.C. and the cash received respectively from a customer and the bank, minus the cash payment made to the receptionist as salaries.