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 $24,000 and,during Year 2,an additional $216,000 of operating expenses were charged on account.On December 31,Year 2,the Accounts Payable balance was $72,000.What is the amount of cash paid for expenses during Year 2?
A)$264,000
B)$240,000
C)$168,000
D)$64,000

Question

Quizplus · Accepted Answer

Ending balance of accounts payable of $72,000 = Beginning balance of accounts payable of $24,000 + Increase due to expenses charge on account of $216,000 - Decrease due to cash paid for expenses (the unknown)
Cash paid for expenses = $24,000 + $216,000 - $72,000 = $168,000

Hilliard Company,a Small Consulting Firm,charges All of Its Operating Expenses