On 1 October 2017, Company A started it\'s business. During the month of October

Question

On 1 October 2017, Company A started it's business. During the month of October the following transactions occurred:

1) On Oct 1, the founder invested $1,210 in the firm in exchange for common stock.

2) On Oct 10, Company A purchased $260 worth of inventory. The company paid for $250 of the inventory in cash and purchased the rest of the inventory on account.

3) On Oct 15, Company A sold $120 worth of inventory for $220. The company collected 50% of the sale in cash and the other 50% of the sale was on account.

4) On Oct 20, Company A collected $80 from accounts receivables.

5) On 30 Oct, Company A paid dividends of $20 in cash.

Question 1) What is the cash balance on 31 October 17:

a) $1,020

b)$1,130

c) $1,150

d) $1,280

e) $1220

Explanation / Answer

Anwer is $1,130

                                    Cash Account

______________________________________________________________

Date   Particulars              Amount($)     Date         Particulars              Amount($)

Oct 1 To Capital                  1,210         Oct 10     By Inventory                   250

Oct 15 To Inventory                 110         Oct 30     By Dividend paid              20

Oct 15 To A/c Receivables       80`        Oct 31    By Balance c/d              1,130

                                              ______                                                           ________

                                             1,400                                                                1,400

                                             _________                                                      ___________

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