The following information is for Auxiliary,Inc.for the month of May: cash sales of $200,000;accounts receivable payments of $200,000;accounts payable payments of $200,000;wages and salaries of $100,000;and,interest payments of $50,000.There are no other cash inflows or outflows for the month of May and its beginning monthly cash balance is $50,000.What is Auxiliary's ending cash balance for May?
A)-$50,000
B)$50,000
C)$100,000
D)$150,000

Question

Quizplus · Accepted Answer

Auxiliary's beginning monthly cash balance is $50,000. 
Cash inflows for May include: 
- Cash sales of $200,000 
- Accounts receivable payments of $200,000

Cash outflows for May include: 
- Accounts payable payments of $200,000 
- Wages and salaries of $100,000 
- Interest payments of $50,000

Therefore, the total cash inflows for May are $400,000 and the total cash outflows are $350,000. 
Subtracting the outflows from the inflows, we get a net cash inflow of $50,000. 
Adding that to the beginning cash balance of $50,000, we get an ending cash balance of $100,000.

The Following Information Is for Auxiliary,Inc