Question

Only Q#25 is related to this fact pattern. In Year 3, Merle Company (the firm) paid $67 to the vendors who sell and deliver supplies to Merle. The firm's fiscal year ends on December 31. Assume all Accounts Payable are related to supplies purchased. Dec. 31, Year 2 Dec. 31, Year 3 Sunnline Click Save and Submit to save and submit. Click Save All Answers to serve all answers w % 5 & 7 4 6 8 9 E R T Y U F G H J K к < c V B N. M

Answer 1

Answer is 61

	Calculation of Accounts payable occured during the year
S.No.	Particulars	Amount ($)
(a)	Accounts Payable at the beginning (end of 31st Dec Year 2)	6
(b)	Accounts payable at the end (end of 31st Dec Year 3)	2
(c)	Amount paid in Year 3 against Accounts payable	67
	Accounts Payable created during the year = ( c) + (b) - (a)	63
	= 67 + 6 - 2
	Check
	At the beginning	6
	Add: Addition during the year as calculated	63
	Total	69
	Less: Paid off	67
	Closing Balance	2
	Accounts payable created during the year implies supplies purchased during the year
	So, Supplies purchased during the year = $ 63
	Calculation of Supplies Expense
S.No.	Particulars	Amount ($)
(a)	Supplies at the beginning of the year	3
(b)	Supplies purchased during the year	63
(c)	Supplies at the end of the year	5
	Supplies Expense = (a) +(b) -( c)	61
	= 3 + 63 - 5
	There fore the supplies expense that would appear in the income statement is $ 61 on accrual basis