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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Cash account balance

During the month, Warwick Co. received $515,000 in cash and paid out $375,000 in cash.

a.    Do the data indicate that Warwick Co. had net income of $140,000 during the month? Explain.

b.    If the balance of the cash account is $200,000 at the end of the month, what was the cash balance at the beginning of the month?

(a)

To determine

T-account:

An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:

  • The title of the account
  • The left or debit side
  • The right or credit side

To indicate: Whether the Company W had net income during the month.

Explanation

The company received $515,000 and paid out $375,000 the amount balance of ($515,000 – $375,000

(b)

To determine
The cash balance at the beginning of the month.

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