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A creditor's account in the accounts payable ledger has a balance of $10,660 as of April 1. After a transaction of $12,900 is posted from the purchases journal and a transaction of $9,250 is posted from the cash payments journal, the balance of the creditor's account on April 30 is:

Question

A creditor's account in the accounts payable ledger has a balance of 10,660asofApril1.Afteratransactionof10,660 as of April 1. After a transaction of 12,900 is posted from the purchases journal and a transaction of $9,250 is posted from the cash payments journal, the balance of the creditor's account on April 30 is:

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Solution

To find the balance of the creditor's account on April 30, we need to follow these steps:

  1. Start with the initial balance of the account on April 1, which is $10,660.

  2. Add the transaction posted from the purchases journal. This is an increase in the account balance because when a company makes purchases on credit, it increases its accounts payable. So, add 12,900totheinitialbalance.12,900 to the initial balance. 10,660 + 12,900=12,900 = 23,560.

  3. Subtract the transaction posted from the cash payments journal. This is a decrease in the account balance because when a company makes payments on its accounts payable, it decreases its accounts payable. So, subtract 9,250fromtheresultobtainedinstep2.9,250 from the result obtained in step 2. 23,560 - 9,250=9,250 = 14,310.

So, the balance of the creditor's account on April 30 is $14,310.

This problem has been solved

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