Question

Tri Fecta, a partnership, had revenues of $374,000 in its first year of operations. The partnership has not collected on $46,300 of its sales and still owes $38.200 on $230,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $33.700 in salaries. The partners invested $49.000 in the business and $21,000 was borrowed on a five-year note. The partnership paid $1680 in interest that was the amount owed for the year and paid $10,000 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. Multiple Choice O $160,520 oo $173,620 $168,620 o O $165,520

Answer 1

Working as follows:

	Amount
Cash received:
Sales revenue	$374,000
Less: Accounts receivables	($46,300)	$327,700
Owner's investment		$49,000
Amount borrowed		$21,000
Total cash received (A)		$397,700
Cash Disbursal:
Merchandise purchased	$230,000
Less: Accounts payable	($38,200)	$191,800
Salaries		$33,700
Interest		$1,680
Insurance		$10,000
Total cash disbursal (B)		$237,180
Ending cash balance (A-B)		$160,520

Hence, the correct option is $160,520