Larry Bar opened a frame shop and completed these transactions: 1.Larry 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

1. Larry invested $40,000 cash and equipment valued at $18,000 for a total of $58,000 in exchange for common stock.
2. Purchased $70 of office supplies on credit, so cash balance remains unchanged.
3. Paid $1,200 cash for the receptionist's salary, reducing the cash balance to $56,800.
4. Sold a custom frame service and collected $1,500 cash on the sale, increasing the cash balance to $58,300.
5. Completed framing services and billed the client $200, but no cash was received, so the cash balance remains at $58,300.

Therefore, the balance of the cash account is $40,000 + $18,000 - $1,200 + $1,500 = $58,300. The correct answer is C.

Larry Bar Opened a Frame Shop and Completed These Transactions