Tidal Co has the following transactions in 2011,its first year of operations: $\begin{array}{lr}
& ` 000 \
\text { Total sales (90\% was collected in 2011) } & \$ 1500 \
\text { Amortisation of patents } & 60 \
\text { Payments for expenses } & 1200 \
\text { Payments for income tax } & 90\
\text { Purchases of fixed assets for cash } & 300 \
\text { GST remitted to the tax department } & 100 \
\text { Depreciation of fixed assets } & 80 \
\text { Proceeds from issue of ordinary shares } & 500 \
\text { Proceeds from short-term borrowing } & 50
\end{array}$ What is the cash balance at 31 December 2011?

Question

Tidal Co has the following transactions in 2011,its first year of operations: $\begin{array}{lr} 
& ` 000 \
\text { Total sales (90\% was collected in 2011) } & \$ 1500 \
\text { Amortisation of patents } & 60 \
\text { Payments for expenses } & 1200 \
\text { Payments for income tax } & 90\
\text { Purchases of fixed assets for cash } & 300 \
\text { GST remitted to the tax department } & 100 \
\text { Depreciation of fixed assets } & 80 \
\text { Proceeds from issue of ordinary shares } & 500 \
\text { Proceeds from short-term borrowing } & 50
\end{array}$ What is the cash balance at 31 December 2011?

Quizplus · Accepted Answer

Cash balance at 31 December 2011 is calculated as follows:Cash receipts:Sales (90% of $1,500,000) $1,350,000Proceeds from issue of ordinary shares 500,000Proceeds from short-term borrowing 50,000Total cash receipts $1,900,000Cash payments:Payments for expenses $1,200,000Payments for income tax 90,000Purchases of fixed assets for cash 300,000GST remitted to the tax department 100,000Total cash payments $1,690,000Net cash inflow $210,000Cash balance at 1 January 2011 $0Cash balance at 31 December 2011 $210,000

Tidal Co Has the Following Transactions in 2011,its First Year