Given Below Are the Daily Balances in the Accounts of the Alta

question 41

Essay

Given below are the daily balances in the accounts of the Alta Loma Company.Assuming only one transaction occurred each day, explain the nature of each transaction on May 1 to May 10. $\begin{array}{lrrrrrr}&& \text { Accts. } & && \text { Accts. } & \text { Owners' } \\&\text { Cash } & \text { Rec. } & \text { Inv. }&\text { Equip.} & \text { Payable } & \text { Equity }\\\hline\text { Beg. Bal. } & \$ 1,250 & \$ 500 & \$ 1,125 & \$ 3,000 & \$ 1,750 & \$ 5,250 \\\text { May 1 } & 1,250 & 500 & 1,325 & 3,000 & 1,950 & 5,250 \\\text { May 2 } & 1,400 & 350 & 1,325 & 3,000 & 1,950 & 5,250 \\\text { May 3 } & 1,225 & 350 & 1,325 & 3,000 & 1,775 & 5,250\\\text { May 4 } & 1,600 & 350 & 1,325 & 3,000 & 1,775 & 5,625 \\\text { May 5 } & 1,375 & 350 & 1,325 & 3,575 & 2,125 & 5,625 \\\text { May 6 } & 1,375 & 350 & 1,200 & 3,575 & 2,000 & 5,625 \\\text { May 7 } & 1,450 & 700 & 1,200 & 3,150 & 2,000 & 5,625\\\text { May 8 } & 1,200 & 700 & 1,200 & 3,150 & 2,000 & 5,375 \\\text { May 9 } & 1,175 & 700 & 1,225 & 3,150 & 2,000 & 5,375 \\\text { May 10 } & 1,175 & 700 & 1,225 & 3,425 & 2,000 & 5,650\end{array}$

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Definitions:

Cash Disbursements

Financial payments made by a business, including expenses, creditor payments, and inventory purchases.

Seasonal Merchandise

Products that are particularly popular or in demand during specific seasons or periods of the year.

Maturity Hedging

A financial strategy used to manage the risk associated with the timing of cash flows, particularly the mismatch between asset maturities and liability maturities.

Short-Term Assets

Assets expected to be converted into cash or used up within one year or an operating cycle, whichever is longer.