On April 1st, your ﬁrm had a beginning cash balance of $280. Your sales for March were $460 and your April sales were $510. During April you had cash expenses of $130 and payments on your
Accounts payable to $210. Your accounts receivable period is 30 days. What is your ﬁrm's beginning
Cash balance on May 1st?

Question

Quizplus · Accepted Answer

The beginning cash balance on May 1st is calculated by adding the beginning cash balance on April 1st ($280) to the cash inflows from March sales ($460, collected in April due to a 30-day accounts receivable period) and subtracting the cash expenses ($130) and payments on accounts payable ($210). This results in a cash balance of $400.

On April 1st, Your ﬁRm Had a Beginning Cash Balance