Use the information below to answer question. Given: Fixed assets: ?85,600 Sales: ?197,000 Stock: ?34,300 Salaries: ?37,000 Purchases: ?127,700 Share capita...
Question 1 Report
Use the information below to answer question.
Given:
Fixed assets: ?85,600
Sales: ?197,000
Stock: ?34,300
Salaries: ?37,000
Purchases: ?127,700
Share capital: ?120,000
Creditors: ?16,050
Motor expenses: ?10,500
Debtors: ?25,000
What is the cash balance?
Answer Details
To calculate the cash balance, we need to set up the balance sheet equation:
Assets =Liabilities + Equity
First, we identify and total up all the assets and liabilities, then use the equity to find the cash balance.
Assets:
1. Fixed assets: N85,600
2. Stock: N34,300
3. Debtors: N25,000
4. Cash: Cash (to be determined)
Liabilities:
1. Creditors: N16,050
Equity:
1. Share capital: N120,000
Now, we calculate the total assets without cash:
Total assets = Fixed assets + Stock + Debtors
Total assets = N85,600 + N34,300 + N25,000 = N144,900
Next, we set up the balance sheet equation including cash:
Total assets = Liabilities + Equity
N144,900 + Cash = N16,050 + N120,000
N144,900 + Cash = N136,050
Solving for cash:
Cash = N136,050 - N144,900
Cash = N12,905
Thus, the cash balance is:
N12,905
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