ABC Corporation began operations on January 1^st 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 31^st is $50,000.In its cash budget for January,ABC's ending cash balance should be equal to

Question

Quizplus · Accepted Answer

ABC's ending cash balance is calculated by subtracting expenses paid in cash from the beginning cash balance. Since expenses are $150,000 and accounts payable is $50,000, $100,000 was paid in cash. Thus, $250,000 - $100,000 = $150,000.

ABC Corporation Began Operations on January 1st of This Year

ABC Corporation Began Operations on January 1^st of This Year