On April 1^st,your firm had a beginning cash balance of $280.Your sales for March were $460 and your April sales were $510.During April you had cash expenses of $150 and payments on your accounts payable of $210.Your accounts receivable period is 30 days.What is your firm's beginning cash balance on May 1^st?

Question

Quizplus · Accepted Answer

- Beginning cash balance on April 1^st = $280 - Sales for April = $510 - Cash expenses = $150 - Payments on accounts payable = $210 - Accounts receivable period is 30 days, so the April sales will be collected in May - Therefore, the total receivables for May = April sales = $510 - The beginning receivables balance for May will be the March sales, which will be collected in April. So the beginning May receivables balance is $460 - Total cash inflow for May = beginning cash balance + collections from April sales = $280 + $460 = $740 - Total cash outflow for May = cash expenses + payments on accounts payable = $150 + $210 = $360 - Ending cash balance for May = beginning cash balance + total cash inflow - total cash outflow = $280 + $740 - $360 = $660 - Therefore, beginning cash balance on May 1st 2020 = $660 - $280 (Beginning cash balance on April 1st 2020) = $380 - Hence, the correct answer is B) $380.

On April 1st,your Firm Had a Beginning Cash Balance of $280.Your

On April 1^st,your Firm Had a Beginning Cash Balance of $280.Your