Question

Tri Fecta, a partnership, had revenues of $371,000 in its first year of operations. The partnership...

Tri Fecta, a partnership, had revenues of $371,000 in its first year of operations. The partnership has not collected on $46,700 of its sales and still owes $38,100 on $170,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $32,800 in salaries. The partners invested $49,000 in the business and $22,000 was borrowed on a five-year note. The partnership paid $2,420 in interest that was the amount owed for the year and paid $9,600 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.

A. 273,420 B. 218,580 C. 231,980 D. 227,180

Business   Accounting   
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Answer #1

Option B is correct

Particulars Amount
Cash collections          324,300
Investment            49,000
Loan            22,000
Cash available          395,300
Interest payment             (2,420)
Insurance payment             (9,600)
Cash payments for goods        (131,900)
Salaries          (32,800)
Cash payments        (176,720)
Cash balance          218,580
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