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 $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?
A) $38,700.
B) $40,300.
C) $300.
D) $41,500.
E) $38,500.

Question

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 $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?
A) $38,700.
B) $40,300.
C) $300.
D) $41,500.
E) $38,500.

Quizplus · Accepted Answer

Larry Bar invested $40,000 cash and the equipment valued at $18,000, which gives a total of $58,000 as cash and equipment.
Larry Bar purchased office supplies on credit, which would not affect the cash account.
Larry Bar paid the receptionist's salary using $1,200 cash, which reduces the cash account to $56,800.
Larry Bar sold a custom frame service and collected $1,500 cash, which increases the cash account to $58,300.
Larry Bar completed framing services and billed the client $200 but did not receive any cash, so the cash account remains at $58,300.
Therefore, the balance of the cash account after these transactions were posted is $40,300 (Option B).

Larry Bar Opened a Frame Shop and Completed These Transactions