1. Tri Facts, a partnership, had revenues of $360,000 in its first year of opera

Question

1. Tri Facts, a partnership, had revenues of $360,000 in its first year of operations. The partnership has not collected on $35,000 of its sales and still owes $40,000 on $150,000 of merchandise It purchased. There was no inventory on hand at the end of the year. The partnership paid $25,000 in salaries. The partners invested $40,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $3,000 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Compute the cash balance at the end of the first year for Tri Facts.

Explanation / Answer

Ans

Details Amount Revenue for the year    3,60,000.00 Less Accounts receivable      -35,000.00 Cash from Revenue    3,25,000.00 Less Purchase of Merchndise -1,50,000.00 Add Pending Payment        40,000.00 Cash for purchase -1,10,000.00 Payment for salaries      -25,000.00 Interest on Loan        -3,000.00 Payment for insurance policy        -8,000.00 Cash form Operating Activity    1,79,000.00 Capital Contribution        40,000.00 Loan borrowings        25,000.00 Cash from Financing activity        65,000.00 Cash at end    2,44,000.00

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