Montauk Oil Co.reports these account balances at December 31,2014 On January 2,2015,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2015,total liabilities are:

Question

Montauk Oil Co.reports these account balances at December 31,2014  On January 2,2015,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2015,total liabilities are:

Quizplus · Accepted Answer

To find the total liabilities on January 3, 2015, we need to take into account the collection of accounts receivable and payment of accounts payable on January 2, 2015.

Accounts receivable decreased by $50,000 (given in the question) and accounts payable decreased by $20,000 (also given in the question).

So, the updated account balances on January 3, 2015 are:

Accounts receivable = $750,000 - $50,000 = $700,000 
Accounts payable = $120,000 - $20,000 = $100,000

Total liabilities = Accounts payable + Taxes payable + Unearned revenue 
= $100,000 + $200,000 + $50,000 
= $350,000

Therefore, the correct answer is B) $350,000.