The balance in Moon Co.\'s accounts payable account at December 31, 2014 was $95
ID: 2449028 • Letter: T
Question
The balance in Moon Co.'s accounts payable account at December 31, 2014 was $950,000 before any necessary year-end adjustments relating to the following:
Goods were in transit to Moon from a vendor on December 31, 2014. The invoice cost was $40,000. The goods were shipped f.o.b. shipping point on December 29, 2014 and were received on January 4, 2015.
Goods shipped f.o.b. destination on December 21, 2014 from a vendor to Moon were received on January 6, 2015. The invoice cost was $25,000.
On December 27, 2014, Moon wrote and recorded checks to creditors totaling $30,000 that were mailed on January 10, 2015.
In Moon's December 31, 2014 balance sheet, the accounts payable should be
Explanation / Answer
Books of Moon Co Accounts payable Account Balance as on Dec. 31,2014 950000 Goods shipped on FOB shipping point basis 40000 Cheques written & recorded not yet mailed added back 30000 Adjusted balance 1020000 NOTE: Goods shipped f.o.b. destination on December 21, 2014 from a vendor to Moon were received on January 6, 2015. The invoice cost was $25,000. Sale Occurs only on Jan.6, 2015
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