Question

The balance in Galaxy Co.'s accounts payable account at December 31, 2015 was $700,000 before any necessary year-end adjustments relating to the following: Goods were in transit to Galaxy from a vendor on December 31, 2015. The invoice cost was $40,000. The goods were shipped f.o.b. shipping point on December 29, 2015 and were received on January 4, 2016. Goods shipped f.o.b. destination on December 21, 2015 from a vendor to Galaxy were received on January 6, 2016. The invoice cost was $25,000. On December 27, 2015, Galaxy wrote and recorded checks to creditors totaling $30,000 that were mailed on January 10, 2016. In Galaxy's December 31, 2015 statement of financial position, the accounts payable should be $ Answer

Answer 1

Statement of financial position December 31, 2015 Galaxy Co.
Accounts payable:
Balance as on Dec. 31,2015	$700,000
Add: Goods shipped on FOB shipping point basis	40000
Add: Cheque written & recorded not yet mailed	30000
Adjusted balance	$770,000