1. Tri Facts, a partnership, had revenues of $360,000 n its first year of operat

Question

1. Tri Facts, a partnership, had revenues of $360,000 n its first year of operations. The partnership has not collected on $35,000 of its sales and still owes $48,000 on $150,000 of merchandise It purchased. There was no inventory on hand at the end of the year. The partnership paid $25,000 in salaries. The partners invested $40,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $3,000 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Compute the cash balance at the end of the first year for Tri Facts.

Explanation / Answer

Cash balance = 40000 + 25000 + 325000 - 110000 - 25000 - 3000 - 8000 = $244000

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