The Lawrence Company records its trade accounts payable net of any cash discounts. At the end of
Question:
The Lawrence Company records its trade accounts payable net of any cash discounts. At the end of 2016, Lawrence had a balance of $300,000 in its trade accounts payable account before any adjustments related to the following items:
1. | Goods shipped to Lawrence FOB shipping point were in transit on December 31. The invoice price of the goods was $50,000, with a 2% discount allowed for prompt payment. |
2. | Goods shipped to Lawrence FOB destination on December 29 arrived on January 2, 2017. The invoice price of the goods was $9,000, with a 4% discount allowed for payment within 20 days. |
3. | On December 10, Lawrence had recorded a shipment received. The recorded invoice price was $24,750, net, with a 1% discount allowed for payment within 14 days. At the end of the year, payment had not been made. |
At what amount should Lawrence report trade accounts payable on its December 31, 2016 balance sheet?
a. | $349,000 | |
b. | $349,250 | |
c. | $357,680 | |
d. | $357,930 |
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina