Cool Corporation’s accounts payable at December 31, 2020 amounted to P5,400,000 before any necessary year-end adjustments relating to the following transactions: ➢ On December 28, 2020, Cool wrote and recorded checks to creditors totaling P2,000,000 causing an overdraft of P500,000 in Cool’s bank account at December 31, 2020. The checks were mailed on January 11, 2021. ➢ On December 29, 2020, Cool purchased and received goods for P750,000, terms 2/10, n/30. Cool records purchases using the net method. The invoice was recorded and paid on January 5, 2021. ➢ Goods shipped FOB destination on December 21, 2020 from a vendor to Cool was received on January 3, 2021. The invoice cost was P325,000. At December 31, 2020, what amount should Cool report as total accounts payable?
Cool Corporation’s accounts payable at December 31, 2020 amounted to P5,400,000 before any necessary year-end adjustments
relating to the following transactions:
➢ On December 28, 2020, Cool wrote and recorded checks to creditors totaling P2,000,000 causing an overdraft of P500,000 in
Cool’s bank account at December 31, 2020. The checks were mailed on January 11, 2021.
➢ On December 29, 2020, Cool purchased and received goods for P750,000, terms 2/10, n/30. Cool records purchases
using the net method. The invoice was recorded and paid on January 5, 2021.
➢ Goods shipped FOB destination on December 21, 2020 from a vendor to Cool was received on January 3, 2021. The invoice
cost was P325,000.
At December 31, 2020, what amount should Cool report as total accounts payable?
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