Hilliard Company, a small consulting firm, charges all of its operating expenses on Accounts Payable. On January 1, Year 2, Hilliard's Accounts Payable balance was $26,500 and, during Year 2, an additional $137,000 of operating expenses were charged on account. On December 31, Year 2, the Accounts Payable balance was $57,300. What is the amount of cash paid for expenses during Year 2?
A)$79,700.
B)$167,800
C)$163,500
D)$106,200
E)$79,700

Question

Quizplus · Accepted Answer

The amount of cash paid for expenses during Year 2 can be calculated as:
Cash paid = Accounts Payable at beginning of Year 2 + Operating expenses charged on account during Year 2 - Accounts Payable at end of Year 2
Cash paid = $26,500 + $137,000 - $57,300
Cash paid = $106,200

Hilliard Company, a Small Consulting Firm, Charges All of Its