Meridian Furniture had the transactions for the month that are summarized below. Purchased $3,600 in supplies with cash.
Issued 400 shares of stock for $45 per share.
Ordered supplies at a cost of $8,000.
Paid a utility bill for $1,000.
If the Cash account had a beginning balance of $20,000,what was the balance at the end of the month?
A)$22,600
B)$25,400
C)$33,400
D)$40,600

Question

Quizplus · Accepted Answer

The impact of the transactions on the Cash account is as follows:
Purchased $3,600 in supplies with cash − decrease Cash by $3,600
Issued 400 shares of stock for $45 per share − increase Cash by $18,000
Ordered supplies at a cost of $8,000 − not a transaction (nothing was exchanged)
Paid a utility bill for $1,000 − decrease Cash by $1,000
Ending Cash balance = Beginning Cash balance + Total increases − Total decreases
= $20,000 − $3,600 + $18,000 − $1,000 = $33,400

Meridian Furniture Had the Transactions for the Month That Are