Alpha Company began operations on January 1 with cash of $75,000. All of January's $150,000 sales were on account. During January no customer collections occurred. Cost of goods sold was $45,000, and there was no ending inventories or any accounts payable.
Use this information to determine the ending balance of cash on hand for January.
Managerial accounting refers to an accounting framework that provides managers with reliable accounting information that they can utilize to make well-informed decisions about the operations of a company. Managerial accounting reports such as production and sales reports are valuable in the process of decision-making.
Answer and Explanation:
Details from the question:
- Beginning cash balance =$75,000
- January sales(credit) =$150,000
- Cost of goods sold =$45,000
Since there is no other collection made from customers in the month,
Ending cash balance = beginning cash balance - cost of goods sold
= $75,000 - $45,000
Therefore, the ending cash balance is $30,000.
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from Business Management: Help & ReviewChapter 9 / Lesson 1