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?

Question

Business

Ella Kim

12 October, 19:52

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?

+3

Answers (2)

Know the Answer?

Hugh Byrd · Answer 1

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.

Picasso · Answer 2

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