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"The following account balances are taken from the December 31, 2018, financial statements of ABZ Advertising Company. The company uses accrual basis accounting.

Advertising Revenue $ 52,402
Cash 46,638
Accounts Receivable 7,861
Interest Expense 2,415
Accounts Payable 5,250
Operating Expenses 42,446
Deferred Revenue 1,326
Equipment 20,437
Income Tax Expense 2,620

The following activities occurred in 2019:

Performed advertising services on account, $62,000.
Received cash payments on account, $11,900.
Received deposits from customers for advertising services to be performed in 2020, $3,500.
Made payments to suppliers on account, $5,250.
Incurred $50,700 of operating expenses; $43,950 was paid in cash and $6,750 was on account and unpaid as of the end of the year.

What is the balance in the Cash account at December 31, 2019?"

User Tim X
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1 Answer

2 votes

Final answer:

The balance in the Cash account for ABZ Advertising Company at the end of 2019 is $12,838. This is calculated by adjusting the starting cash balance with the cash impacts of transactions throughout the year.

Step-by-step explanation:

To calculate the balance in the Cash account at December 31, 2019, we need to consider all the transactions that affected the cash balance throughout the year:







Now we calculate the final cash balance:

$46,638 (starting balance) + $11,900 (payments received) + $3,500 (future deposits) - $5,250 (payments to suppliers) - $43,950 (operating expenses) = $12,838

This is the ending cash balance on December 31, 2019.

User Nicolas Goy
by
7.9k points
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