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On May 1, your firm had a beginning cash balance of $175. Your sales for April were $430 and your May sales were $480. During May, you had cash expenses of $110 and payments on your accounts payable of $290. Your accounts receivable period is 30 days. What is your firm's beginning cash balance on June 1?

Respuesta :

Answer:

Begininig cash balance June 1 205

Explanation:

Sales April 430

Sales May 480

 

Begininig cash balance May 1 175

Cash expenses                        -110

Payments                               -290

Sales april                                 430

Begininig cash balance June 1 205

hoangkhangpham94

Answer:

Firm's beginning cash balance on June 1: $205

Explanation:

+ Cash receipt from sales on account is not received until 30 days later as accounts receivable period is 30 days. As a result, Cash receipt from sales in May = Sales on credit in April = $430

+ Beginning cash balance on June is calculated as:

Beginning cash balance in May + Cash receipt from credit sales in May - Cash expenses in May - Cash payment to account payable in May = 175 + 430 -110 - 290 = $205.

So, the answer is $205.

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