Recording Transactions The Piedmont Company had the following transactions durin

Question

Recording Transactions The Piedmont Company had the following transactions during June 20X1: Collections of accounts receivable, $75,000. Payment of accounts payable, $45,000. Acquisition of inventory, $18,000, on open account. Sale of merchandise, $30,000 on open account and $23,000 for cash. The sold merchandise cost Piedmont Company $28,000. Depreciation on equipment of $1,000 in June. Declared and paid cash dividends of $15,000. Use the balance sheet equation format to enter these transactions into the books of Piedmont Company. Suppose that Piedmont has a cash balance of $15,000 at the beginning of June. What was the cash balance on June 30?

Explanation / Answer

Piedmont company Cash balance on June 30 = $35000

Piedmont company cash account

Balance B/d

$15000

Payments of accounts payable

$45000

Collection of account receivable

$75000

Acquisition of inventory

$18000

Sale

$23000

Dividend paid

$15000

Balance C/d

$35000

Depreciation is non cash expense, hence ignored

Piedmont company cash account

Balance B/d

$15000

Payments of accounts payable

$45000

Collection of account receivable

$75000

Acquisition of inventory

$18000

Sale

$23000

Dividend paid

$15000

Balance C/d

$35000

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