Accounts Payable T-Account for Machinery Suppliers

Steps:

• Opening balance on 30 Apr 2020: $30,000 owed to suppliers.
• Purchases during year: Increase in machinery cost = $42,000 -$30,000 = $12,000 added to owing.
• Total owing before payments: $30,000 +$12,000 = $42,000.
• Payments to suppliers: $25,000 subtracted from owing.
• Closing balance on 30 Apr 2021: $42,000 -$25,000 = $17,000.

Why the correct option is correct:

• Follows the accounts payable formula: Opening balance + Credit purchases - Cash payments = Closing balance.

Why the others are wrong:

• A. $6,000: Subtracts payments from opening balance, ignoring purchases.
• B. $13,000: Subtracts purchases from payments, unrelated to balances.
• D. $20,000: Subtracts only$10,000 from opening, miscalculating purchases.

Final answer: C