Question

As of December 31, Year 1, Mason Company had $500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. What is the amount of cash that will be reported on the balance sheet at the end of Year 2?

Answer 1

The amount of cash that will be reported on the balance sheet at the end of Year 2 is $900

Step-by-step explanation:

Mason Company carries its operations based on cash. In other words, its purchases and sales are in cash, not credit.

The amount of cash of Mason Company will be:

Beginning Balance + cash revenue - cash expenses

$500 Beggining Balance

+$1,200 cash revenue

- $800 cash expenses

= $900