On January 1 Joe's Hardware Store Ltd.had $2,300 in cash and had neither accounts receivable nor payable outstanding.During the month of January, the store had received orders from two contractors for building materials for $20,500, each, which would be paid at the end of January.During the month, the store had expenses of $15,500 for salaries, $40,500 for inventory, and $2,200 of utilities.What is the January 31^st cash balance for Joe's Hardware Store Ltd.?

Question

Quizplus · Accepted Answer

Starting cash balance = $2,300
Received orders from two contractors for building materials = $20,500 + $20,500 = $41,000 (but these will be paid at the end of January, so we cannot include them in the cash balance)
Expenses for salaries + inventory + utilities = $15,500 + $40,500 + $2,200 = $58,200
Net change in cash balance = Starting cash balance - Expenses = $2,300 - $58,200 = -$55,900
Therefore, the January 31st cash balance for Joe's Hardware Store Ltd. is -$55,900 + $41,000 = -$14,900. 
Hence, the best answer choice is B.