Question

​Diamond, Inc. had the following transactions during​ June: Performed services for​ $2,000 on​ account; received cash on​ account, $8,000; paid​ $700 for repair​ expense; paid​ $1,800 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June​ transactions?

Answer 1

The combined effect on Cash for Diamond, Inc. from the transactions in June is an increase of $5,500, which is obtained by receiving $8,000 on account and paying out a total of $2,500 for repair expenses and previous debts.

Step-by-step explanation:

The combined effect on Cash of the June transactions for Diamond, Inc. can be calculated as follows:

Services performed on account increase Accounts Receivable but do not affect cash: $0 increase in cash.Cash received on account: $8,000 increase in cash.Paying repair expense: $700 decrease in cash.Paying a supplier for a previous debt: $1,800 decrease in cash.

To find the net effect, sum up the increases and decreases in cash:

Cash Increase from received account payments = $8,000

Cash Decreases from payments for repair expense and supplier = $700 + $1,800 = $2,500

Net effect on Cash = Cash Increase - Cash Decreases = $8,000 - $2,500 = $5,500 increase in cash

Therefore, the combined effect on Cash for Diamond, Inc. during June from these transactions is an increase of $5,500.

Answer 2

Answer: $5,500 (Increase)

Step-by-step explanation:

Given that,

Performed services =​ $2,000 on​ account

Received cash on​ account = $8,000

Paid​ for repair​ expense = $700

Payment to a supplier that it owed from the previous month = $1,800

Cash paid = Paid​ for repair​ expense + Payment to a supplier

= $700 + $1,800

= $2,500

Effect = Received cash - Paid cash

= $8,000 - $2,500

= $5,500 (Increase)