Question

At December 31, Year 1, the accounting records of Braun Corporation contain the following items:

Accounts Payable $16,000
Accounts Receivable $40,000
Land $240,000
Cash?
Capital Stock $260,000
Equipment $120,000
Building $180,000
Notes Payable $190,000
Retained Earnings $160,000

If Capital Stock is $260,000, what is the December 31, Year 1 cash balance?

Answer 1

To find the December 31, Year 1 cash balance of Braun Corporation, we need to subtract the total liabilities from the total assets. By calculating the difference between assets and liabilities, we find that the cash balance is $306,000.

Step-by-step explanation:

To find the December 31, Year 1 cash balance, we need to subtract the total liabilities from the total assets. The given items include Accounts Payable ($16,000), Accounts Receivable ($40,000), Land ($240,000), Cash, Capital Stock ($260,000), Equipment ($120,000), Building ($180,000), Notes Payable ($190,000), and Retained Earnings ($160,000).

To calculate the cash balance, we add up all the assets (Accounts Receivable, Land, Cash, Equipment, and Building), and subtract the liabilities (Accounts Payable and Notes Payable) and the equity (Capital Stock and Retained Earnings).

Cash = Total Assets - Total Liabilities - Equity

Cash = ($40,000 + $240,000 + ? + $120,000 + $180,000) - ($16,000 + $190,000) - ($260,000 + $160,000)

Simplifying the equation, we have:

• Cash = ($580,000 + ?) - ($206,000) - ($420,000)
• Cash = $580,000 + ? - $206,000 - $420,000
• Cash = $580,000 + ? - $626,000
• Cash = ? - $46,000

We know that Cash + $46,000 = ?

Now we can substitute the given Capital Stock value:

• $260,000 + $46,000 = ?
• $306,000 = ?

Therefore, the December 31, Year 1 cash balance is $306,000.