Andrea Conaway opened Wonderland Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: Conaway invested $13,500 cash in the business.
2) Conaway contributed $20,000 of photography equipment to the business.
3) The company paid $2,100 cash for an insurance policy covering the next 24 months.
4) The company received $5,700 cash for services provided during January.
5) The company purchased $6,200 of office equipment on credit.
6) The company provided $2,750 of services to customers on account.
7) The company paid cash of $1,500 for monthly rent.
8) The company paid $3,100 on the office equipment purchased in transaction #5 above.
9) Paid $275 cash for January utilities.
Based on this information, the balance in the cash account at the end of January would be:
A) $41,450.
B) $12,225.
C) $18,700.
D) $15,250.
E) $13,500.

Question

Quizplus · Accepted Answer

To calculate the balance in the cash account at the end of January, we start with the initial cash investment of $13,500. Then, we add cash received for services ($5,700) and subtract cash payments for insurance ($2,100), rent ($1,500), part of the office equipment ($3,100), and utilities ($275). The contribution of photography equipment does not affect the cash balance. The services provided on account do not immediately impact cash. Therefore, the calculation is $13,500 + $5,700 - $2,100 - $1,500 - $3,100 - $275 = $12,225.

Andrea Conaway Opened Wonderland Photography on January 1 of the Current