ABC Corporation began operations on January 1st of this year with a cash balance of $250,000.ABC had sales of $200,000 for the month of January,all on credit.ABC allows its customers 30 days to pay.ABC's expenses for January equal $150,000,and ABC's ending balance in accounts payable at January 31st is $50,000.In its cash budget for January,ABC's ending cash balance should be equal to

Question

Quizplus · Accepted Answer

ABC Corporation's ending cash balance for January would be calculated by starting with the initial cash balance and adjusting for cash inflows and outflows during the month. Since all sales were on credit, there were no cash inflows from sales in January. The only cash outflow was for expenses, which totaled $150,000. Therefore, the ending cash balance is the initial balance of $250,000 minus the $150,000 in expenses, resulting in $100,000. However, the correct calculation considering the initial information and the mistake in explanation leads to the realization that the explanation provided does not match any of the given options correctly. The mistake was in the explanation process, not in the selection, as none of the options correctly follows from the explanation given. The correct approach to find the ending cash balance should consider all cash inflows and outflows, but with the given data and options, there seems to be a misunderstanding in the explanation process.

ABC Corporation Began Operations on January 1st of This Year