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?

Question

Quizplus · Accepted Answer

Larry's initial investment was $40,000 in cash and $18,000 in equipment, totaling $58,000. 
Transaction 2, the purchase of office supplies on credit, did not affect the cash account. 
Transaction 3, the payment of the receptionist's salary, decreased the cash account by $1,200. 
Transaction 4 increased the cash account by $1,500. 
Transaction 5 did not affect the cash account since the client was billed but not paid yet. 
Therefore, the balance in the cash account after these transactions is $40,000 + $18,000 - $1,200 + $1,500, which is equal to $40,300. 
Therefore, the correct answer is C.

Larry Bar Opened a Frame Shop and Completed These Transactions