Answered: Gear Company’s accounts payable balance…

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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Gear Company’s accounts payable balance at December 31, 2021 was P1,100,000 before considering the following transactions: A. Goods were in transit from a vendor to Gear on December 31, 2021. The invoice price was P80,000 and the goods were shipped FOB shipping point on December 29, 2021. The goods were received on January 4, 2022. B. Goods shipped to Gear, FOB shipping point on December 20, 2021 from a vendor were lost in transit. The invoice price was P50,000. On January 5, 2022, Gear filed a P50,000 claim against the common carrier. In its December 31, 2021 statement of financial position, Gear should report accounts payable of:

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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