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Accounting! Retained Earnings 10 pts best answer?

Please help! 10 pts best answer!

The following is a summary of operations for August 2013 for Brittany's Headwear:

* Brittany contributed $800 of cash into her business. She also borrowed $300 from her boyfriend.

* Brittany purchased $700 of hat materials from Materials Inc. She paid cash.

* Brittany also was able to purchase a further $200 of materials on credit from Handy Crafts and will pay for this on September 15.

* Brittany paid $280 cash for rent for August for a table at the market

* Brittany used $600 of the materials to make hats in August. Her product was a huge hit and she sold all of the hats. She charged $1000 for all the hats in total. All customers paid her cash except John Doe who took his hat but paid her $25 the next weekend (Sept 7)

* Brittany met Sarah X. who loved her hats. She received a special order for ten hats. Sarah paid a $100 deposit for the hats. Brittany has not yet started this order.

* Brittany paid cash for the taxi fare of $90 during the month to pick up materials and deliver the hats of the market.

How much cash did Brittany have in her business account at the end of August 2013?

1 Answer

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  • 8 years ago
    Favorite Answer

    This is not a Retained Earnings question, but rather about Cash transactions. Start with $0 for the month.

    * Brittany contributed $800 of cash into her business. She also borrowed $300 from her boyfriend.

    + $800 + $300

    * Brittany purchased $700 of hat materials from Materials Inc. She paid cash.

    -$700

    * Brittany also was able to purchase a further $200 of materials on credit from Handy Crafts and will pay for this on September 15.

    No change for August

    * Brittany paid $280 cash for rent for August for a table at the market

    $-280

    * Brittany used $600 of the materials to make hats in August. Her product was a huge hit and she sold all of the hats. She charged $1000 for all the hats in total. All customers paid her cash except John Doe who took his hat but paid her $25 the next weekend (Sept 7)

    +$975 ($1,000 sales less $25 on account)

    * Brittany met Sarah X. who loved her hats. She received a special order for ten hats. Sarah paid a $100 deposit for the hats. Brittany has not yet started this order.

    +$100

    * Brittany paid cash for the taxi fare of $90 during the month to pick up materials and deliver the hats of the market.

    -$90

    How much cash did Brittany have in her business account at the end of August 2013?

    $800+$300-$700-$280+$975+$100-$90 = $1,105

    Question is testing your ability to distinguish transactions that affect the Cash account

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