Question

Larry Bar opened a frame shop and completed these transactions: 1. Larry started the shop by investing $41,500 cash and equipment valued at $19,500 in exchange for common stock. 2. Purchased $220 of office supplies on credit. 3. Paid $2700 cash for the receptionist's salary. 4. Sold a custom frame service and collected $6000 cash on the sale. 5. Completed framing services and billed the client $350. What was the balance of the cash account after these transactions were posted?

Answer 1

Answer: $44,800

Explanation:

Given that,

Investment = $41,500

cash and equipment = $19,500

Office supplies purchases on credit = $220

Paid cash for the receptionist's salary = $2700

Cash received from selling custom frame service = $6000

Framing services =  $350

Ending cash flow = Capital brought in by Larry Bar - Paid cash for the receptionist's salary + Cash received from selling custom frame service

                            = $41,500 - $2700 + $6000

                            = $44,800