Kappa Inc. reported accounts payable on December 31, 2019 at P 2,200,000 before any necessary year-end adjustments relating to the following transactions: Goods shipped to Kappa under terms FOB Shipping Point on December 22, 2019 was lost in transit. The invoice cost of P 40,000 was not recorded by Kappa. On January 7, 2020 filed a P 40,000 claim against the shipper of the lost goods. On December 27, 2019, a vendor authorized Kappa to return, for full credit, goods shipped and billed at P 70,000 on December 3, 2019. The returned goods were shipped by Kappa on December 28, 2019. A P 70,000 credit memo was received and recorded by Kappa on January 5, 2020. On December 31, 2019, Kappa has a P 500,000 debit balance in accounts payable to Sigma Inc., a supplier, resulting from a P 500,000 advance payment for goods to be manufactured. What amount should be reported by Kappa Inc. as accounts payable on December 31, 2019? A. P 2,170,000 B. P2,680,000 C. P2,730,000 D. P 2,670,000

Kappa Inc. reported accounts payable on December 31, 2019 at P 2,200,000 before any necessary year-end adjustments relating to the following transactions: Goods shipped to Kappa under terms FOB Shipping Point on December 22, 2019 was lost in transit. The invoice cost of P 40,000 was not recorded by Kappa. On January 7, 2020 filed a P 40,000 claim against the shipper of the lost goods. On December 27, 2019, a vendor authorized Kappa to return, for full credit, goods shipped and billed at P 70,000 on December 3, 2019. The returned goods were shipped by Kappa on December 28, 2019. A P 70,000 credit memo was received and recorded by Kappa on January 5, 2020. On December 31, 2019, Kappa has a P 500,000 debit balance in accounts payable to Sigma Inc., a supplier, resulting from a P 500,000 advance payment for goods to be manufactured. What amount should be reported by Kappa Inc. as accounts payable on December 31, 2019? A. P 2,170,000 B. P2,680,000 C. P2,730,000 D. P 2,670,000

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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Question

100%

Kappa Inc. reported accounts payable on December 31, 2019 at P 2,200,000 before any
necessary year-end adjustments relating to the following transactions:
Goods shipped to Kappa under terms FOB Shipping Point on December 22, 2019 was
lost in transit. The invoice cost of P 40,000 was not recorded by Kappa. On January 7,
2020 filed a P 40,000 claim against the shipper of the lost goods.
On December 27, 2019, a vendor authorized Kappa to return, for full credit, goods
shipped and billed at P 70,000 on December 3, 2019. The returned goods were
shipped by Kappa on December 28, 2019. AP 70,000 credit memo was received and
recorded by Kappa on January 5, 2020.
On December 31, 2019, Kappa has a P 500,000 debit balance in accounts payable to
Sigma Inc., a supplier, resulting from a P 500,000 advance payment for goods to be
manufactured.
What amount should be reported by Kappa Inc. as accounts payable on December 31, 2019?
А. Р2,170,000
В. Р2,680,000
C. P 2,730,000
D. P 2,670,000

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