Marco Nelson opened a frame shop and completed these transactions: 1.Marco started the shop by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
2.Purchased $70 of office supplies on credit.
3.Paid $1,200 cash for the receptionist's salary.
4.Sold a custom frame service and collected $1,500 cash on the sale.
5.Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?
A)$300.
B)$41,500.
C)$40,300.
D)$38,500.
E)$38,700.

Question

Quizplus · Accepted Answer

- Transaction 1: Cash account +$40,000, Equipment account +$18,000, Common stock account +$58,000
- Transaction 2: Cash account -$70, Accounts payable account +$70
- Transaction 3: Cash account -$1,200, Salaries expense account +$1,200
- Transaction 4: Cash account +$1,500, Sales revenue account +$1,500
- Transaction 5: Accounts receivable account +$200, Framing services revenue account +$200

Therefore, the ending balance of the Cash account is: 
$40,000 - $70 - $1,200 + $1,500 = $38,230
Plus, $200 in accounts receivable from transaction 5, which hasn't been collected yet: 
$38,230 + $200 = $40,430

So, the correct choice is C.

Marco Nelson Opened a Frame Shop and Completed These Transactions