Question

Carlisle Transport had $4,640 cash at the beginning of the period. During the period, the firm collected $1,580 in receivables, paid $2,168 to supplier, had credit sales of $6,952, and incurred cash expenses of $500. What was the cash balance at the end of the period?

Answer 1

Step-by-step explanation:

we start with $4,640. that is cash.

then we add $1,580 by collecting receivables. that means they forced the customers to pay for open bills.

then we subtract $2,168 as they pay suppliers.

the trap here seems to be the next thing : the credit sales of $6,952. that means customer bought services or products, but they can pay later. we don't know how much later (and how long the business period of Carlisle is). but we can assume that the customers will not pay in this period. and that will be collected receivables in the next period or so.

so, we add 0.

and then we subtract $500 in cash expenses.

4640

+ 1580

- 2168

+ 0

- 500

--------------

$ 3552

the cash balance at the end was $3,552.