Question

a. X Co. had a $4,700 beginning balance in accounts payable on January 1, Year 8. During Year 8, the company incurred $67,600 of operating expenses on account and paid $68,900 cash to settle accounts payable. Based on this information alone, determine the amount of the ending balance in accounts payable.

Answer 1

$3,400

Step-by-step explanation:

- the operating expenses on account increase the accounts payable balance and the cash settlements reduce the accounts payable balance.

To get the closing balance of a liability account like accounts payable we use the formula below:

Opening balance + Operating expenses on account - Amounts settled = Closing balance

= $4,700 + $67,600 - $68,900 = $3,400