Question

Larry Bar opened a frame shop and completed these transactions:1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.2. Purchased $70 of office supplies on credit.3. Paid $1,200 cash for the receptionist's salary.4. Sold a custom frame service and collected a $1,500 cash on the sale.5. Completed framing services and billed the client $200.What was the balance of the cash account after these transactions were posted?

Answer 1

Answer:

The balance of the cash account after these transactions were posted for $40,300

Explanation:

The computation of the balance of the cash account is shown below:

= Cash invested - paid cash for the receptionist's salary + cash collection for giving custom frame service

= $40,000 - $1,200 + $1,500

= $40,300

The other items which are mentioned in the question reflected credit sales so we do not consider these items.