Lori Nichols opened an engineering office and titled the business Engineering En

Question

Lori Nichols opened an engineering office and titled the business Engineering Enterprises P.C. During its first month of operations, it completed the following transactions: I. Lori invested $32,000 in the business, which in turn issued common stock to her. II. The business purchased equipment on account for $10,000. II. The business provided engineering services on account, $13,000. Ill. The business paid salaries to the receptionist, $4,000. IV. The business received cash from a customer as payment on account $6,000. V. The business borrowed $11,000 from the bank, issuing a note payable. At the end of the month, Cash would equal: A. $32,000. B. $45,000. C. $76,000. D. $39,000.

Explanation / Answer

The correct answer would be option B = $45,000.

Explanation = $32,000 (Cash inflows as an investment / issuance of stock) - $4,000 (Salaries paid) + $6,000 (Cash collected from a customer) + $11,000 (Borrowings from the bank)

I hope my solution solves your query.

Regards.

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