[Tammijones]

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

[AdamUTsel]

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

[tlarocca]

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!