Calculate the Accounts Payable balance. (Enter the balance, along with a "Bal." reference on the correct side of the T-account.) Accounts Payable May 2 8,500 21,000 May 1 May 22 13,000 1,300 May 5 7,500 May 15 400 May 23
Calculate the Accounts Payable balance. (Enter the balance, along with a "Bal." reference on the correct side of the T-account.) Accounts Payable May 2 8,500 21,000 May 1 May 22 13,000 1,300 May 5 7,500 May 15 400 May 23
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Calculating Accounts Payable Balance**
To calculate the Accounts Payable balance, enter the balance along with a "Bal." reference on the correct side of the T-account.
**T-Account Summary: Accounts Payable**
| Date | Debit | | Date | Credit |
|---------|-------|--|---------|---------|
| May 2 | 8,500 | | May 1 | 21,000 |
| May 22 | 13,000| | May 5 | 1,300 |
| | | | May 15 | 7,500 |
| | | | May 23 | 400 |
### Analyzing the T-Account
**Debits:**
- May 2: 8,500
- May 22: 13,000
**Credits:**
- May 1: 21,000
- May 5: 1,300
- May 15: 7,500
- May 23: 400
### Calculating the Balance
**Total Debits:**
= 8,500 + 13,000
= 21,500
**Total Credits:**
= 21,000 + 1,300 + 7,500 + 400
= 30,200
**Accounts Payable Ending Balance:**
= Total Debits - Total Credits
= 21,500 - 30,200
= -8,700
The ending balance of Accounts Payable would be 8,700 on the credit side, indicating a credit balance.
This calculation reflects the total amount owed by the entity after accounting for all debits and credits within the given period.
**Note:**
In accounting, debits and credits are used to record all business transactions. In a T-account:
- The left side (debit) reflects what the company owes.
- The right side (credit) reflects payments or reductions in what the company owes.
**Educational Tip:**
Understanding T-accounts and the effect of debits and credits on each account is essential for accurate financial accounting. Always double-check calculations to ensure all debits and credits are accounted for correctly.
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