QQuestionAccounting
QuestionAccounting
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:
Andrea invested $15,400 cash in the business in exchange for common stock.
Andrea contributed $39,000 of photography equipment to the business.
The company paid $4,000 cash for an insurance policy covering the next 24 months.
The company received $7,600 cash for services provided during January.
The company purchased $8,100 of office equipment on credit.
The company provided $4,650 of services to customers on account.
The company paid cash of $3,400 for monthly rent.
The company paid $5,000 on the office equipment purchased in transaction #5 above.
Paid $465 cash for January utilities.
Based on this information, the balance in the cash account at the end of January would be:
Multiple Choice
A $66,150.
B $10,135.
C $24,400.
D $19,050.
E $14,785.
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Answer
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Step 1:I'll solve this step-by-step using proper accounting principles and LaTeX formatting:
Step 2:: Calculate Cash Inflows
- Initial investment: 15,400 - Cash from services: 7,600 Total Cash Inflows: 23,000
Step 3:: Calculate Cash Outflows
- Rent payment: 3,400 - Utilities payment: 465 - Office equipment payment: 5,000 - Insurance prepayment: 4,000 Total Cash Outflows: 12,865
Step 4:: Calculate Ending Cash Balance
\text{Ending Cash Balance} = \text{Total Cash Inflows} - \text{Total Cash Outflows}
\text{Ending Cash Balance} = 23,000 - 12,865 = 10,135
Step 5:: Verify Transactions Not Affecting Cash
- Equipment contribution (non-cash) - Services provided on account (non-cash) - Office equipment purchased on credit (non-cash)
Final Answer
The correct answer is B: $10,135.
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