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?
a) $441,000
b) $469,000
c) $505,000
d) $519,000

Answer 1

Answer:

correct option is a) $441,000

Explanation:

given data

Cash payments = $455,000

beginning accounts payable = $64,000

ending accounts payable = $50,000

solution

we use here T account equation and get accrual-basis purchases that is

ending accounts payable = beginning accounts payable + Accrual purchases - Cash payments   .......................1

put here value we get

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

solve it we get

Accrual purchases = $441,000

so correct option is a) $441,000