Accounts Payable (e) 1,000 (c) 4,000 (h) X 4,000 X 8,000 X Bal. 7,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Only need explanation for accounts payable.
Transcribed Image Text:Accounts Payable
(e)
1,000
(c)
4,000
(h)
X
4,000 X
8,000 X
Bal.
7,000 X
Transcribed Image Text:9:17 1
AA
v2.cengagenow.com
he following transactions occurred during August:
(a) Invested cash in the business, $30,000.
(b) Purchased a used van for cash, $8,000.
(c) Purchased plumbing equipment on account, $4,000.
(d) Received cash for services rendered, $3,000.
(e) Paid cash on account owed from transaction (c), $1,000.
(f) Paid rent for the month, $700.
(g) Paid phone bill, $100.
(h) Earned revenue on account, $4,000.
(i) Purchased office supplies for cash, $300.
(i) Paid wages to student, $500.
(k) Purchased a one-year insurance policy, $800.
(1) Received cash from services performed in transaction (h), $3,000.
(m) Paid cash for advertising expense, $2,000.
(n) Purchased additional plumbing equipment for $2,000, paying $500 cash and spreading
the remaining payments over the next six months.
(0) Earned revenue from services for the remainder of the month of $2,800: $1,100 in
cash and $1,700 on account.
(p) Withdrew cash at the end of the month, $3,000.
Required:
1. Enter the transactions in T accounts, identifying each transaction with its corresponding
letter.
2. Foot and balance the accounts where necessary.
3. Prepare a trial balance as of August 31, 20--.
Expert Solution
Introduction
Accounts payable (AP) is the sum owed to creditors and suppliers by a corporation (also referred to as a current liability account). Accounts payable is listed as a current liability on the balance sheet.
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