Question

During the month of July, the Scolari Corporation received $60,000 in investments from owners, paid $25,000 cash for supplies, and purchased $10,000 of supplies on account. The ending balance in the accounts payable account for the month of July is ________.
a. $25,000 debit.
b. $15,000 debit.
c. $10,000 credit.
d. $10,000 debit.

Answer 1

Answer:

d. $10,000 debit.

Explanation:

The computation of the ending balance in the accounts payable account is shown below:

= Purchase of supplies on account

= $10,000

The journal entry for this transaction is presented below:

Supplies A/c Dr                         $10,000

   To Accounts payable A/c                     $10,000

(Being supplies purchased)

Since in the month of July, this transaction is made which is presented above. For closing the account we have to debit the account payable account.

The investment received is not related to the accounts payable, so it is not considered, and the other transaction in which the supplies was purchase on cash was also not related to the  accounts payable

The accounts payable is exist when the purchase is made on a credit basis, not on a cash basis.