The Best Candy Company issued stock for $30,000 cash on Jan. 20,2004. During 2004 the company recorded revenue on account of $12,000 and expenses on account of $5,500. Candy Company reveived $8,200 cash from accounts receivable and paid $4,100 on the accounts payable. The company also purchased land for $5,000 cash. The beginning cash balance was zero. Based on this information, the amount of change in cash is:??
I just need a formula to follow but the options are:

a. $29,100
b. 31,500
c. 22,974
d. 35,600

Just track your cash inflows and outflows. Its simple adding and subtracting. Transactions that occur on account have no influence on the cash.

Hi

The answer is $29,100.
The formula is simply + Cash In
And - Cash out

Revenue and expenses are not cash flows.
But the amounts received into receivables and amounts paid on payables are.

Formula:

Cash at the beginning of the year
ADD: Cash from all source
Sale of stock
Bond issue
Shareholder/Owner contribution
Decrease in Accounts Receivable

DEDUCT: Use of Cash
Purchase of fixed Assets, Investments
Payment of dividends
Decrease in Accounts Payable
Increase in Prepaid Expenses



Hope this helps!