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The balance in Ashwood Company's Accounts Payable account at December 31, 2016, was $1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2016. The invoice cost was $85,000, and the goods were shipped FOB shipping point on December 29, 2016. The goods were received on January 2, 2017. Goods shipped FOB shipping point on December 20, 2016, from a vendor to Ashwood were lost in transit. The invoice cost was $40,000. On January 5, 2017, Ashwood filed a $40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2016, from a vendor to Ashwood were received on January 6, 2017. The invoice cost was $20,000. What amount should Ashwood report as accounts payable on its December 31, 2016, balance sheet? a. $1,345,000 b. $1,325,000 c. $1,260,000 d. $1,285,000

Respuesta :

Answer:

$1,325,000 is the amount to be recorded as accounts payable on Ashwood's report of 31 December, 2016 balance sheet

Explanation:

Here, we want to calculate the amount that Ashwood should report as accounts payable on its December 31, 2016 balance sheet.

The correct answer to this is adding together : The balance in Ashwood Company's Accounts Payable account at December 31, 2016 + Invoice cost of goods in transit from vendor on  December 31, 2016 + invoice cost of goods lost in transit

From the question, we can identify the following;

Balance in Ashwood Company's Accounts Payable account at December 31, 2016 = $1,200,000

invoice cost of goods in transit from vendor on  December 31, 2016 = $85,000

invoice cost of goods lost in transit = $40,000

Plugging these values into the equation, we have;

1,200,000 + 85,000 + 40,000 = $1,325,000

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