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4 March, 23:02

The following transactions for the month of March have been journalized and posted to the proper accounts. Mar. 1 The business received $ 8 comma 000 cash and issued common stock to stockholders. Mar. 2 Paid the first month's rent of $ 700. Mar. 3 Purchased equipment by paying $ 3 comma 500 cash and executing a note payable for $ 8 comma 000. Mar. 4 Purchased office supplies for $ 700 cash. Mar. 5 Billed a client for $ 10 comma 000 of design services completed. Mar. 6 Received $ 7 comma 900 on account for the services previously recorded. What is the balance in Cash on March 6?

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  1. 4 March, 23:13
    0
    March 6 cash balance is $11,000

    Explanation:

    Cash receipt from share issue $8,000

    payment of monthly rent ($700)

    Purchase of equipment ($3,500)

    purchase of office supplies ($700)

    Receipt of cash $7,900

    Cash balance $11,000

    The cash balance as at March 6 is $11,000

    Note that the issue of $8,000 in part payment for equipment purchase has no cash implication yet, as well as the $10,000 invoicing of customers, hence they were excluded from cash flow computation above
  2. 4 March, 23:16
    0
    the balance in Cash on March 6 is $19,300

    Explanation:

    Consider only cash transactions and account for the balance as follows:

    Calculation of Cash Balance - March:

    Mar. 1. Receipts from issued common stock $8,000

    Mar. 2 Rental Payment ($ 700)

    Mar. 3 Purchase of Equipment ($3,500)

    Mar. 3 Note Payable $8,300

    Mar. 4 Office Supplies Purchase ($700)

    Mar. 6 Receipts from Debtors $7,900

    Cash Balance $19,300
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