Answer to Question #167390 in Accounting for davina

Question

Jenny has a bank balance of $550 at the start of the week. During the week the following transactions occur.

 

Day 1

She sells goods on credit for $876

Day 2

She receives a cheque for $400 from a credit customer

Day 3

She purchases office equipment with a list price of $1,000 but receives a 10% discount for paying immediately by cheque

How much does Jenny have in the bank at the end of the week?

Answer 1

The opening bank balance is $550 and as at day 2, the creditor paid $400 through cheque which increased the total cash at bank to $950.

As at day 3, Jenny purchased an item which cost $1000 but was given a cash discount of 10% which is equivalent to $100 of which Jenny paid the sum of $900 by cheque which reduce the total cash at bank to $50.

Therefore, Jenny have the sum of $50 at the end of the week in the bank.