Consider the following independent scenarios:a) At January 1, Year 2 accounts receivable was $20,000. Revenue earned on account was $100,000. Cash collected on accounts receivable during Year 1 was $45,000. What was the ending balance in accounts receivable on December 31, Year 2?b) At January 1, Year 2, accounts payable was $17,000. During Year 2, expenses on account were $72,000. The amount of cash paid on accounts payable was $20,000. What was the ending balance in accounts payable on December 31, Year 2?
What will be an ideal response?
a) $75,000
b) $69,000
a) $20,000 beg. AR + $100,000 rev. on acct. - $45,000 cash coll. on AR = $75,000 end. AR
b) $17,000 beg. AP + $72,000 exp. on acct. -$20,000 cash paid on AP = $69,000 end. AP
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