The following financial information is available for the year 2012: Given this information, what is the beginning cash balance?

Question

The following financial information is available for the year 2012:  Given this information, what is the beginning cash balance?

Quizplus · Accepted Answer

The beginning cash balance can be calculated by adding the net increase in cash provided by operating activities to the net increase in cash provided by financing activities and then subtracting the net increase in cash used for investing activities. In this case, the net increase in cash provided by operating activities is $12,900, the net increase in cash provided by financing activities is $5,000 ($2,500 + $2,500), and the net increase in cash used for investing activities is $14,100. Therefore, the beginning cash balance is:

Beginning cash balance = $12,900 + $5,000 - $14,100
Beginning cash balance = $3,800

The Following Financial Information Is Available for the Year 2012