On June 1, Year 1, Gadget Co. is formed by two investors with a combined contribution of $1,000,000 in cash. The following transactions were then incurred in June, Year 1: The company initially purchased $750,000 of inventory, $100,000 of machinery, and $50,000 of cars. On June 15, Year 1, Gadget sold inventory costing $250,000 to a customer for $550,000 on 30-day credit terms. Gadget incurred bills totalling $125,000 in June, Year 1 that are payable on July 1, Year1. What will the resulting cash balance be after paying these bills? on July 1, Year 1? 

A. Gadget will have $525,000 excess cash. 

B. Gadget will be short $25,000 in cash. 

C. Gadget will be short $275,000 cash. 

D. Gadget will have $475,000 excess cash

Answer rating: 100% (QA)

The detailed answer for the above question is provided below I... View the full answer