Question

During February 2014, its first month of operations, the owner of Schwenn Enterprises invested cash of $40,000. Schwenn had cash sales of $8,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in cash at February 28?

A) $6,000 credit
B) $34,000 debit
C) $48,000 debit
D) $26,000 credit

Answer 1

The balance in cash at February 28 is $34,000 debit (B).

Step-by-step explanation:

To determine the balance in the cash account at February 28, we need to analyze the cash transactions during the month of February.

1. The owner invested $40,000 in cash.
2. The business had cash sales of $8,000.
3. The business paid $14,000 in expenses.

Now, let's calculate the balance in cash at February 28:

• Opening balance: $40,000
• Add cash sales: +$8,000
• Subtract expenses: -$14,000

The final balance in cash at February 28 is $34,000 debit (B).