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Near the end of its first year of operations, December 31, 2021, Vaughn Designs Ltd. approached the local bank for a $ 19,400 loan and
Near the end of its first year of operations, December 31, 2021, Vaughn Designs Ltd. approached the local bank for a $ 19,400 loan and was asked to submit financial statements prepared on an accrual basis. Although the company kept no formal accounting records, it did maintain a record of cash receipts and payments. The following information is available for the year ended December 31:
Additional information:
1. | Fees from design work earned but not yet collected amounted to $ 2,430. | |
2. | The equipment was purchased at the beginning of January and has an estimated six-year useful life. The company uses straight-line depreciation. | |
3. | Supplies on hand on December 31 were $ 1,230. | |
4. | Rent payments included a $ 1,350 per month rental fee and a $ 1,880 deposit that is refundable at the end of the two-year lease. (Hint: Use the Prepaid Rent account for the refundable deposit.) | |
5. | The insurance was purchased on February 1 for a one-year period expiring on January 31, 2022. | |
6. | Salaries earned for the last four days in December and to be paid in January 2022 amounted to $ 3,000. | |
7. | At year-end, it was determined that an additional $ 7,600 is owed for income tax. |
Calculate the cash balance at December 31.
Cash Balance | 5580 |
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