During December,Horn Inc.purchased $800 of supplies on account for use in its business.At the end of December,20% of the supplies were still on hand,but only 75% had been paid.What amounts will appear on the company's balance sheet on December 31?
$\begin{array}{cc}
\text { Supplies on Hand } & \text { Accounts Payable } \
\end{array}$
a.
$\begin{array}{cc}
&&&\$800&&&&&&&\$600
\end{array}$
b.
$\begin{array}{cc}
&&&\$160&&&&&&&\$200
\end{array}$
c.
$\begin{array}{cc}
&&&\$640&&&&&&&\$200
\end{array}$
d.
$\begin{array}{cc}
&&&\$160&&&&&&&\$800
\end{array}$

Question

During December,Horn Inc.purchased $800 of supplies on account for use in its business.At the end of December,20% of the supplies were still on hand,but only 75% had been paid.What amounts will appear on the company's balance sheet on December 31?  
$\begin{array}{cc}
  \text { Supplies on Hand } &  \text { Accounts Payable } \
\end{array}$
a.
$\begin{array}{cc}
&&&\$800&&&&&&&\$600
\end{array}$
b.
$\begin{array}{cc}
&&&\$160&&&&&&&\$200
\end{array}$
c.
$\begin{array}{cc}
&&&\$640&&&&&&&\$200
\end{array}$
d. 
$\begin{array}{cc}
&&&\$160&&&&&&&\$800
\end{array}$

Quizplus · Accepted Answer

The supplies still on hand are valued at 20% of the original cost, which is $160 ($800 x 0.2). However, only 75% of the total amount owed has been paid, which means the accounts payable balance is $600 ($800 x 0.75). Therefore, the balance sheet will show:
Supplies on Hand: $160
Accounts Payable: $600

During December,Horn Inc Supplies on Hand Accounts Payable \begin{array}{cc} \text { Supplies on Hand } & \text { Accounts Payable } \\\end{array} Supplies on Hand ​ Accounts Payable ​

During December,Horn Inc $\begin{array}{cc} \text { Supplies on Hand } & \text { Accounts Payable } \\\end{array}$