Question

U Co. had cash purchases and payments on account during the current year totaling $455,000. U's beginning and ending accounts payable balances for the year were $64,000 and $50,000, respectively. What amount represents U's accrual-basis purchases for the year?

Answer 1

Answer:

$441,000

Explanation:

The U Co. accrual- basis purchases for the current year can be determined using the following mentioned formula:

Accrual basis purchases=ending accounts payable balance+Cash paid for purchases during the current year-opening accounts payable balance

Accrual basis purchases=$50,000+$455,000-$64,000=$441,000