The beginning balance in Accounts Payable on Company A’s Year 2 Balance Sheet is $180,000. The company purchase on account inventory of $200,000 during Year 2, and paid suppliers $40,000 in cash. What is the beginning balance in Accounts Payable on the Year 3 Balance Sheet? Assuming no other transactions affected the account during the year.
Correct answer. The Beginning balance in Accounts Payable in Year 3 = Ending Balance in Accounts Payable in Year 2 (?) = the Beginning Balance in Accounts Payable 180,000 + Purchase on account 200,000 – Payment 40,000 = 340,000
