The balance in Wellstocked Company's accounts payable account on December 31,2014,was $1,225,000 before the following information was considered: What amount should Wellstocked report as accounts payable in its December 31,2014,balance sheet?

Question

The balance in Wellstocked Company's accounts payable account on December 31,2014,was $1,225,000 before the following information was considered:  What amount should Wellstocked report as accounts payable in its December 31,2014,balance sheet?

Quizplus · Accepted Answer

The accounts payable balance on December 31, 2014, was $1,225,000 before any adjustments. The adjustments lead to an increase in accounts payable of $60,000 ($280,000 - $220,000) due to the purchase of inventory, and a decrease of $20,000 ($245,000 - $225,000) due to the payment of accounts payable.

Therefore, the adjusted accounts payable balance on December 31, 2014, is calculated as:

$1,225,000 + $60,000 - $20,000 = $1,265,000

The closest answer choice to this amount is B: $1,285,000.

The Balance in Wellstocked Company's Accounts Payable Account on December