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At December 31, 2018, the accounting records of Braun Corporation contain the following items: Accounts Payable = $15,000 Accounts Receivable = $38,000 Land = $238,000 Cash = ? Capital Stock = ? Equipment = $118,000 Building = $178,000 Notes Payable = $188,000 Retained Earnings = $158,000 If Capital Stock is $258,000, what is the December 31, 2018 cash balance?
At December 31, 2018, the accounting records of Braun Corporation contain the following items:
Accounts Payable = $15,000
Accounts Receivable = $38,000
Land = $238,000
Cash = ?
Capital Stock = ?
Equipment = $118,000
Building = $178,000
Notes Payable = $188,000
Retained Earnings = $158,000
If Capital Stock is $258,000, what is the December 31, 2018 cash balance?
Expert Solution
Basic accounting equation is Assets = Liabilities + Equity
Total liabilities and equity is computed as follows:
| Accounts Payable | $15,000 |
| Notes Payable | 188,000 |
| Capital Stock | 258,000 |
| Retained Earnings | 158,000 |
| Total liabilities and equity | $619,000 |
Therefore total assets amounts also to $619,000. To determine the amount of cash, computation is as follows:
| Total assets | $619,000 |
| Less: Assets other than cash | |
| Accounts Receivable | $38,000 |
| Land | 238,000 |
| Equipment | 118,000 |
| Building | 178,000 |
| Total assets other than cash | $572,000 |
| Cash balance | $47,000 |
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