If the opening balance of cash for April is $20,000, cash receipts are estimated to be $398,000 and cash payments are estimated as $300,000, the opening cash balance at the beginning of May is: A. $118,000 B. $109,000 C. $69,000 D. $20,000
Question
If the opening balance of cash for April is 398,000 and cash payments are estimated as 118,000 B. 69,000 D. $20,000
Solution
To calculate the opening cash balance at the beginning of May, you need to add the opening balance of cash for April to the cash receipts, then subtract the cash payments.
Here's how you do it:
Step 1: Add the opening balance of cash for April to the cash receipts. 398,000 (cash receipts) = $418,000
Step 2: Subtract the cash payments from the result in step 1. 300,000 (cash payments) = $118,000
So, the opening cash balance at the beginning of May is 118,000.
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