The following information is for Auxiliary, Inc. for the month of May: cash sales of $200,000; accounts receivable payments of $200,000; accounts payable of $200,000; wages and salaries of $100,000; and, interest payments of $50,000. There are no other cash inflows or outflows for the month of May and its beginning monthly cash balance is $50,000. What is Auxiliary's ending cash balance for May?
A) -$50,000
B) $50,000
C) $100,000
D) $150,000

Question

Quizplus · Accepted Answer

- Beginning cash balance: $50,000
- Cash inflows: 
    - Cash sales: $200,000
    - Accounts receivable payments: $200,000
    - Total inflows: $400,000
- Cash outflows: 
    - Accounts payable: $200,000
    - Wages and salaries: $100,000
    - Interest payments: $50,000
    - Total outflows: $350,000 
- Ending cash balance: 
    - Beginning cash balance + Total inflows - Total outflows = 
    - $50,000 + $400,000 - $350,000 = $100,000. 
    Therefore, the correct answer is C.

The Following Information Is for Auxiliary, Inc