The balance in Ashwood Companys accounts payable account at December 31, 2019, was $1,200,000 before any necessary

Question:

The balance in Ashwood Company’s accounts payable account at December 31, 2019, was $1,200,000 before any necessary year-end adjustment relating to the following:
• Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was $85,000, and the goods were shipped FOB shipping point on December 29, 2019.
The goods were received on January 2, 2020.
• Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was $40,000. On January 5, 2020, Ashwood filed a $40,000 claim against the common carrier.
• Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was $20,000.
What amount should Ashwood report as accounts payable on its December 31, 2019, balance sheet?
a. $1,260,000
b. $1,285,000
c. $1,325,000
d. $1,345,000

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...

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