he balance in Milk Tea Company’s accounts payable at December 31, 2021 was P2,500,000 before considering the following information: · On December 27, 2021, Milk Tea wrote checks to creditors totaling P500,000. The checks were released and recorded on January 3, 2022. · On December 28, 2021, Milk Tea received goods from suppliers amounting to P350,000, terms 3/10, 2/15, n/30, FOB Destination. The related invoice was received and recorded on January 2, 2022. The company uses the net method to account for cash discounts. · Milk Tea’s supplier erroneously billed a purchase made on cash. The invoice cost was P500,000, terms 2/10, n/30. The related invoice was received and recorded on December 22, 2021. · A debit balance in a supplier’s account amounting to P50,000 was charged against the accounts payable ledger balance. The amount represents advance payments for goods to be delivered in January 2022.
he balance in Milk Tea Company’s accounts payable at December 31, 2021 was P2,500,000 before considering the following information: · On December 27, 2021, Milk Tea wrote checks to creditors totaling P500,000. The checks were released and recorded on January 3, 2022. · On December 28, 2021, Milk Tea received goods from suppliers amounting to P350,000, terms 3/10, 2/15, n/30, FOB Destination. The related invoice was received and recorded on January 2, 2022. The company uses the net method to account for cash discounts. · Milk Tea’s supplier erroneously billed a purchase made on cash. The invoice cost was P500,000, terms 2/10, n/30. The related invoice was received and recorded on December 22, 2021. · A debit balance in a supplier’s account amounting to P50,000 was charged against the accounts payable ledger balance. The amount represents advance payments for goods to be delivered in January 2022.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
The balance in Milk Tea Company’s accounts payable at December 31, 2021 was P2,500,000 before considering the following information:
· On December 27, 2021, Milk Tea wrote checks to creditors totaling P500,000. The checks were released and recorded on January 3, 2022.
· On December 28, 2021, Milk Tea received goods from suppliers amounting to P350,000, terms 3/10, 2/15, n/30, FOB Destination. The related invoice was received and recorded on January 2, 2022. The company uses the net method to account for cash discounts.
· Milk Tea’s supplier erroneously billed a purchase made on cash. The invoice cost was P500,000, terms 2/10, n/30. The related invoice was received and recorded on December 22, 2021.
· A debit balance in a supplier’s account amounting to P50,000 was charged against the accounts payable ledger balance. The amount represents advance payments for goods to be delivered in January 2022.
· A credit balance in a customer’s account amounting to P37,500 was charged to the accounts payable ledger balance. The amount represents advance payments for goods to be delivered the following year.
What amount should Milk Tea Company report as total accounts payable at December 31, 2021?
· On December 27, 2021, Milk Tea wrote checks to creditors totaling P500,000. The checks were released and recorded on January 3, 2022.
· On December 28, 2021, Milk Tea received goods from suppliers amounting to P350,000, terms 3/10, 2/15, n/30, FOB Destination. The related invoice was received and recorded on January 2, 2022. The company uses the net method to account for cash discounts.
· Milk Tea’s supplier erroneously billed a purchase made on cash. The invoice cost was P500,000, terms 2/10, n/30. The related invoice was received and recorded on December 22, 2021.
· A debit balance in a supplier’s account amounting to P50,000 was charged against the accounts payable ledger balance. The amount represents advance payments for goods to be delivered in January 2022.
· A credit balance in a customer’s account amounting to P37,500 was charged to the accounts payable ledger balance. The amount represents advance payments for goods to be delivered the following year.
What amount should Milk Tea Company report as total accounts payable at December 31, 2021?
P2,365,500
P2,532,000
P2,362,000
P2,362,500
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