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On May 1, Vaya Corp. had a beginning cash balance of $175. Vaya’s sales for April were $430, and May sales were $480. During May, the firm had cash expenses of $110 and made payments on accounts payable of $290. Vaya’s accounts receivable period is 30 days. What is the firm’s beginning cash balance on June 1?

Respuesta :

Answer:

The firm’s beginning cash balance on June 1 is $ 205.

Explanation:

We have to use the following the formula to reach to the beginning cash

Beginning Cash balance june 1 = Beginning cash balance may 1 + sales - expenses

Beginning Cash balance june 1 = [$175] + [$430] - [$110 + $290]

Beginning Cash balance june 1= $ 205

Important. The may sales are not included in the calculation because accounts receivable time is 30 days, so may accounts receivable wont be collected until june.

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