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31 October, 16:02

Dole Corp.'s accounts payable at December 31, 2014, totaled $750,000 before any necessary year-end adjustments relating to the following transactions: • On December 27, 2014, Dole wrote and recorded checks to creditors totaling $350,000 causing an overdraft of $100,000 in Dole's bank account at December 31, 2014. The checks were mailed out on January 10, 2015. • On December 28, 2014, Dole purchased and received goods for $150,000, terms 2/10, n/30. Dole records purchases and accounts payable at net amounts. The invoice was recorded and paid January 3, 2015. • Goods shipped f. o. b. destination on December 20, 2014 from a vendor to Dole were received January 2, 2015. The invoice cost was $65,000. At December 31, 2014, what amount should Dole report as total accounts payable?

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  1. 31 October, 18:25
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    Adjusted 1,312,000

    Explanation:

    Unadjusted 750,000

    outstanding checks 350,000

    Purchase net of discount 147,000

    Shipped FOB destination 65,000

    the title of the goods passes when the supplier deliver to the carrier.

    Adjusted 1,312,000

    The check were not mailed until next year, so it doesn't decrease the AP balance

    The purchase is recorded net of discount

    150,000 x (1-2%) = 147,000
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