The balance in Ashwood Company’s Accounts Payable account at December 31, 2007 was $900,000 before any necessary year-end adjustment relating to the following:

Goods were in transit from a vendor to Ashwood on December 31, 2007. The invoice cost was $50,000, and the goods were shipped FOB shipping point on December 29, 2007. The goods were received on January 2, 2008. Goods shipped FOB shipping point on December 19, 2007 from a vendor to Ashwood were lost in transit. The invoice cost was $25,000. On January 5, 2008 Ashwood filed a $25,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2007 from a vendor to Ashwood was received on January 6, 2008. The invoice cost was $15,000. What amount should Ashwood report as accounts payable on its December 31, 2007 balance sheet?

a. $925,000

b. $940,000

c. $950,000

d. $975,000

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