Question

Tri Fecta, a partnership, had revenues of $367,000 in its first year of operations. The partnership has not collected on $45,800 of its sales and still owes $39,600 on $240,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $26,200 in salaries. The partners invested $47,000 in the business and $26,000 was borrowed on a five-year note. The partnership paid $2,860 in interest that was the amount owed for the year and paid $9,300 for a two-year insurance policy on the first day of business. Ignore income taxes.

Compute the cash balance at the end of the first year for Tri Fecta.
a) $ 332,110
b) $ 161,640
c) $ 166,290
d) $ 155,440

Answer 1

Answer: $ 155,440

Step-by-step explanation:

Receipt:

Cash received from customer(367,000 - 45,800) 321,200

Investment 47,000

Borrowed money 26,000

Total Receipts 394,200

Disbursement:

Payment to vendor(240,000 - 39,600) 200,400

Salary 26,200

Interest 2,860

Insurance policy 9,300

Total Disbursement (B) 238,760

Cash balance (A - B) 155,440