The following information is available for Royal Corp for 2017: Assuming that all purchases are made on account, accounts payable at the end of the year are
A)$17,000
B)$22,800
C)$15,800
D)$24,000

Question

The following information is available for Royal Corp for 2017:  Assuming that all purchases are made on account, accounts payable at the end of the year are
A)$17,000 
B)$22,800 
C)$15,800 
D)$24,000

Quizplus · Accepted Answer

Accounts payable at the end of the year can be calculated using the following formula: 
Ending Accounts Payable = Beginning Accounts Payable + Purchases - Cash Payments on Accounts Payable 
From the given information, we know that: 
Beginning Accounts Payable = $8,000 
Purchases = $78,000 
Cash Payments on Accounts Payable = $70,200 
Plugging in these values: 
Ending Accounts Payable = $8,000 + $78,000 - $70,200 = $15,800 
Therefore, the best choice is C, $15,800.

The Following Information Is Available for Royal Corp for 2017