Question

Question 10 Suppose that the beginning balance of Accounts Payable (A/P) for Better Than That, Inc. on January 1, 2017 was $17,934. The ending balance of accounts payable on December 31, 2017 was $12,603. During 2017, Better Than That paid $20,338 in cash to its creditors. What is the value of Better Than That’s purchases on credit in 2017?

Answer 1

Answer:

Purchases on credit in 2017 are $15,007

Explanation:

Credit Purchases can be determined by opening a Total Accounts Payable T - Account as follows :

Total Accounts Payable T - Account

Debit :

Closing Balance                                   $12,603

Cash Payments                                    $20,338

Totals                                                     $32,941

Credit :

Opening Balance                                  $17,934

Credit Purchase (Balancing figure)      $15,007

Totals                                                     $32,941