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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**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.
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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