

$Change In Current LiabilitiesCash Balance -$36,700 carried forwardAccounts Payable increased by $37,700Updated cash balance?
Assets
Cash
Accounts Receivable
Food & Beverage Inventory
Prepaid Insurance
Long-Term Assets
    Less Depreciation
2019
$35,000
0
0
6,000
140,000
 
2020
$1,000
79,700
3,000
5,500
135,000
(4,000)
Total Assets
$181,000
$220,200
Liabilities
Accounts Payable
Unearned Revenue
Bank Loan
Other Liabilities
 
$0
0
60,000
120,000
 
$37,700
5,000
50,000
120,000
Total Liabilities
$180,000
$212,700
Shareholders' Equity
Common Shares
Retained Earnings
 
$1,000
0
 
$1,000
6,500
Shareholders' Equity
$1,000
$7,500
Liabilities + Equity
$181,000
$220,200

To calculate the updated cash balance, let's break down the given information.

### 1. Cash Balance (Initial Information):
- The starting cash balance carried forward was **- $36,700**.
- There was an increase in **Accounts Payable** by **$37,700**.

### 2. Effect of Accounts Payable on Cash:
An increase in **Accounts Payable** indicates that expenses were deferred (not paid in cash), effectively improving the cash balance. Since **Accounts Payable increased by $37,700**, this increase should be added to the cash balance.

### 3. Updated Cash Balance Calculation:
Starting cash balance = **- $36,700**

Increase in Accounts Payable = **+ $37,700**

Updated cash balance = **- $36,700 + $37,700** = **$1,000**

### Updated Cash Balance: **$1,000**

This result aligns with the **2020 balance sheet** where the cash is listed as **$1,000**.

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Would you like more details on any part of the calculation, or do you have specific questions?

Here are 5 related questions:
1. How does an increase in liabilities, like Accounts Payable, affect cash flow in detail?
2. Can you explain how depreciation impacts the total assets calculation?
3. Why is unearned revenue considered a liability, and how does it affect cash?
4. What is the significance of Shareholders' Equity in balancing the equation?
5. How do changes in bank loans influence both liabilities and cash flow?

**Tip:** Accounts Payable represents short-term liabilities, which temporarily improve cash flow by deferring payments for goods or services already received.

$Change In Current LiabilitiesCash Balance -$36,700 carried forwardAccounts Payable increased by $37,700Updated cash balance? Assets Cash Accounts Receivable Food & Beverage Inventory Prepaid Insurance Long-Term Assets Less Depreciation 2019 $35,000 0 0 6,000 140,000 2020 $1,000 79,700 3,000 5,500 135,000 (4,000) Total Assets $181,000 $220,200 Liabilities Accounts Payable Unearned Revenue Bank Loan Other Liabilities $0 0 60,000 120,000 $37,700 5,000 50,000 120,000 Total Liabilities $180,000 $212,700 Shareholders' Equity Common Shares Retained Earnings $1,000 0 $1,000 6,500 Shareholders' Equity $1,000 $7,500 Liabilities + Equity $181,000 $220,200

Learn how to calculate the updated cash balance with a detailed step-by-step breakdown of accounting principles. This problem involves managing cash flow, balance sheets, and the formula for cash balance calculation. Suitable for undergraduate finance and accounting students.

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