Question

On April 1, the cash account balance was $19,850. During April, cash receipts totaled $301,720 and the April 30 balance was $14,290. Determine the cash payments made during April.

Answer 1

ANSWER

$307,280

EXPLANATION

Cash is an asset to a business and the most liquid of all of its assets.

Using the double-entry accounting system, cash transactions are recorded as follows:

Increase in cash                        Debit

Decrease in cash                         Credit

The cash balance at the end of the period is determined as follows:

                                                                         $

Cash balance at the beginning                     xxx

Add cash receipt during the period             xxx

Less cash payment made                              (xxx)

Cash balance at the end                                 xxx

We can apply this to the question:

14,290 = 19850 + 301, 720 - y           (let y denote cash payment )

y = 19,850 + 301,720 - 14,290

y = 307,280

cash payment made  $307,280