Kendall Company earned $20,000 of cash revenue. Kendall Co. incurred $10,000 of utility expense on account during

Question:

Kendall Company earned $20,000 of cash revenue. Kendall Co. incurred $10,000 of utility expense on account during Year 1. The company made cash payments of $5,000 to reduce its accounts payable during Year 1.

Required
Based on this information alone, determine the following for Kendall Company.
a. The balance of the accounts payable that would be reported on the December 31, Year 1, balance sheet.
b. The amount of expenses that would be reported on the Year 1 income statement.
c. The amount of net cash flow from operating activities that would be reported on the Year 1 statement of cash flows.
d. The amount of retained earnings that would be reported on the Year 1 balance sheet.
e. Why are the answers to Requirements b and c different?

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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