A company had credit sales of $30,000 and cash sales of $10,000 during the month of May. Also during May, the company paid wages of $1,000 and utilities of $800. It also received payments from customers on account totaling $4,000. At the beginning of May, the company had a cash balance of $25,000. What is the company's cash balance at the end of May?

Question

Quizplus · Accepted Answer

The company's total cash inflows in May were:
Cash sales: $10,000
Payments from customers on account: $4,000
Total cash inflows: $14,000

The company's total cash outflows in May were:
Wages: $1,000
Utilities: $800
Total cash outflows: $1,800

To calculate the company's cash balance at the end of May, we need to add the cash inflows and subtract the cash outflows from the beginning cash balance:
Beginning cash balance: $25,000
Total cash inflows: $14,000
Total cash outflows: $1,800
Ending cash balance: $37,200

Therefore, the best choice is C.

A Company Had Credit Sales of $30,000 and Cash Sales