Fancy Foods Incorporated had an ending balance in accounts payable of $6,000. The company incurred $72,000 of operating expenses on account and paid $90,000 cash to settle accounts payable. Determine the beginning balance in accounts payable.
A)$12,000
B)$24,000
C)$96,000
D)$156,000

Question

Quizplus · Accepted Answer

Beginning balance in accounts payable can be calculated using the following formula:

Beginning balance in accounts payable = Ending balance in accounts payable - (Operating expenses incurred on account - Cash paid to settle accounts payable)

Plugging in the given values:

Beginning balance in accounts payable = $6,000 - ($72,000 - $90,000)

Beginning balance in accounts payable = $6,000 - (-$18,000)

Beginning balance in accounts payable = $24,000

Therefore, the correct choice is B.

Fancy Foods Incorporated Had an Ending Balance in Accounts Payable