Question

Larry Bar opened a frame shop and completed these transactions:

1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2. Purchased $70 of office supplies on credit.
3. Paid $1,200 cash for the receptionist's salary.
4. Sold a custom frame service and collected a $1,500 cash on the sale.
5. Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Answer 1

The balance of the cash account after these transactions were posted is $40,300

Step-by-step explanation:

The computation of the cash account after transactions are shown below:

= Cash balance - paid cash for receptionist salary + cash received for sale

= $40,000 - $1,200 + $1,500

= $40,300

All other transactions are related to the credit sales. So, we do not consider them.

Hence, the transactions which are mentioned above are only relevant and therefore we consider these only.