Question

The Carmichael Company started operations this month and had the following transactions 1. Owners invested $20,000 to start the company 2. Purchased 55 units of inventory for $7,425 (total) 3. Sold 25 units of inventory for $4,750 (total) 4. Paid $2,900 for office rent 5. Paid payroll of $4,500 6. Paid dividends of $800 What are the company's cash balance at the end of the month?

Answer 1

Answer:

The company's cash balance at the end of the month is $9,125.

Explanation:

Cash Account                             DR.          CR.            Balance

1. Owners Investment                $20,000                    $20,000

2. Purchased 55 units                                $7,425      $12,575

3. Sale 25 units                          $4,750                       $17,325

4. Office Rent Payment                               $2,900     $14,425

5. Payroll Payment                                      $4,500     $9,925

6. Paid dividends of                                    $800        $9,125