Question

Addison, Inc. reports:

Cash provided by operating activities 2,300,000
Cash used by investing activities640,000
Cash used by financing activities 220,000
Beginning cash balance340,000

What is Addison's ending cash balance?

Answer 1

Addison's ending cash balance is calculated by starting with the beginning cash balance, adding the cash provided by operating activities, and then subtracting the cash used by investing and financing activities. The ending cash balance for Addison, Inc. is $1,780,000.

Step-by-step explanation:

To calculate Addison's ending cash balance, we need to take into account the cash flows and the beginning cash balance. Here's how you can determine the ending cash balance:

• Start with the beginning cash balance: $340,000
• Add cash provided by operating activities: $2,300,000
• Subtract cash used by investing activities: $640,000
• Subtract cash used by financing activities: $220,000
• The result is the ending cash balance.

So the calculation would be $340,000 beginning balance + $2,300,000 - $640,000 - $220,000 = $1,780,000 ending cash balance.