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Tennison Corporation had the following transactions in its first year of operations:
| Sales (90% collected in year) | $ | 1,500,000 | |
| Bad debt write-offs | 60,000 | ||
| Disbursements for costs and expenses | 1,200,000 | ||
| Disbursements for income taxes | 90,000 | ||
| Purchases of fixed assets | 400,000 | ||
| Depreciation of fixed assets | 80,000 | ||
| Proceeds from issuance of common stock | 500,000 | ||
| Proceeds from short-term borrowings | 100,000 | ||
| Payments on short-tern borrowings | 50,000 | ||
What is the cash balance at year end?
$150,000.
$170,000.
$210,000.
$280,000.
Expert Answer
| Cash receipts: | |
| Sales | 1350000 |
| Proceeds from issuance of common stock | 500000 |
| Proceeds from short-term borrowings | 100000 |
| Total Cash receipts | 1950000 |
| Payments: | |
| Disbursements for costs and expenses | 1200000 |
| Disbursements for income taxes | 90000 |
| Purchases of fixed assets | 400000 |
| Payments on short-tern borrowings | 50000 |
| Total Payments | 1740000 |
| Cash balance at year end | 210000 |
| Option3 is correct | |
