A Company Orders Ten Laptops At $600 Each. Four Are Broken Upon Delivery. For What Amount Should Accounts Payable Be Credited In This Situation? A. $1,200 B. $2,400 C. $6,000 D. $3,600

Feb 27, 2025 by ADMIN 196 views

**A Company's Dilemma: Accounting for Damaged Goods**

Understanding the Situation

When a company orders goods, it is essential to consider the possibility of damage or defects during delivery. In this scenario, a company orders ten laptops at $600 each, but upon delivery, four of them are found to be broken. This raises a question about how to account for the damaged goods and what amount should be credited to Accounts Payable.

The Importance of Accurate Accounting

Accurate accounting is crucial for any business, as it helps in maintaining transparency and ensuring that financial records are up-to-date. In this case, the company needs to account for the damaged laptops and determine the correct amount to be credited to Accounts Payable.

Analyzing the Situation

Let's break down the situation:

The company orders ten laptops at $600 each, making the total cost $6,000.
Four laptops are found to be broken upon delivery, which means the company cannot use them.
The company needs to determine the correct amount to be credited to Accounts Payable.

Calculating the Amount to be Credited

To calculate the amount to be credited to Accounts Payable, we need to consider the following:

The company has paid for ten laptops, but only six are usable.
The cost of the four broken laptops needs to be deducted from the total cost.

The cost of the four broken laptops is $600 x 4 = $2,400.

Determining the Correct Amount

Now, let's determine the correct amount to be credited to Accounts Payable:

The company has paid for ten laptops, but only six are usable, making the total cost $6,000 - $2,400 = $3,600.
The company needs to credit Accounts Payable for the amount of $3,600.

Conclusion

In conclusion, when a company orders goods and some of them are found to be damaged upon delivery, it is essential to accurately account for the damaged goods. In this scenario, the company needs to credit Accounts Payable for the amount of $3,600, which is the cost of the six usable laptops.

Answer

The correct answer is D. $3,600.

Additional Considerations

While this scenario may seem straightforward, there are additional considerations that the company needs to take into account:

The company may need to negotiate with the supplier to resolve the issue and receive a replacement or a refund for the damaged laptops.
The company may need to consider the warranty and return policies of the supplier to determine the next course of action.
The company may need to update its accounting records to reflect the change in the number of usable laptops.

By considering these additional factors, the company can ensure that it is accurately accounting for the damaged goods and taking the necessary steps to resolve the issue.

Key Takeaways

Accurate accounting is crucial for any business.
When a company orders goods and some of them are found to be damaged upon delivery, it is essential to accurately account for the damaged goods.
The company needs to credit Accounts Payable for the amount of $3,600, which is the cost of the six usable laptops.

Recommendations

The company should negotiate with the supplier to resolve the issue and receive a replacement or a refund for the damaged laptops.
The company should update its accounting records to reflect the change in the number of usable laptops.
The company should consider the warranty and return policies of the supplier to determine the next course of action.
A Company's Dilemma: Accounting for Damaged Goods =====================================================

Q&A: Accounting for Damaged Goods

Q: What happens when a company orders goods and some of them are found to be damaged upon delivery? A: When a company orders goods and some of them are found to be damaged upon delivery, it is essential to accurately account for the damaged goods. This involves determining the correct amount to be credited to Accounts Payable and taking the necessary steps to resolve the issue.

Q: How do I determine the correct amount to be credited to Accounts Payable? A: To determine the correct amount to be credited to Accounts Payable, you need to consider the following:

The company has paid for the total number of laptops ordered.
The cost of the damaged laptops needs to be deducted from the total cost.

Q: What if the company has already paid for the damaged laptops? A: If the company has already paid for the damaged laptops, it needs to credit Accounts Payable for the amount of the damaged laptops. In this scenario, the company would credit Accounts Payable for the amount of $2,400, which is the cost of the four damaged laptops.

Q: What if the company wants to return the damaged laptops to the supplier? A: If the company wants to return the damaged laptops to the supplier, it needs to follow the return policy of the supplier. The company may need to provide proof of damage and follow the supplier's return procedures.

Q: How do I update my accounting records to reflect the change in the number of usable laptops? A: To update your accounting records, you need to:

Record the initial purchase of the laptops.
Record the return of the damaged laptops to the supplier.
Record the credit to Accounts Payable for the amount of the damaged laptops.

Q: What if the company wants to negotiate with the supplier to resolve the issue? A: If the company wants to negotiate with the supplier to resolve the issue, it needs to:

Review the supplier's return policy and warranty.
Determine the next course of action with the supplier.
Update its accounting records to reflect the change in the number of usable laptops.

Q: What are the key takeaways from this scenario? A: The key takeaways from this scenario are:

Accurate accounting is crucial for any business.
When a company orders goods and some of them are found to be damaged upon delivery, it is essential to accurately account for the damaged goods.
The company needs to credit Accounts Payable for the amount of the damaged laptops.

Q: What are the recommendations for resolving this issue? A: The recommendations for resolving this issue are:

Negotiate with the supplier to resolve the issue and receive a replacement or a refund for the damaged laptops.
Update your accounting records to reflect the change in the number of usable laptops.
Consider the warranty and return policies of the supplier to determine the next course of action.

Conclusion

In conclusion, when a company orders goods and some of them are found to be damaged upon delivery, it is essential to accurately account for the damaged goods. By following the steps outlined in this article, you can ensure that your accounting records are up-to-date and that you are taking the necessary steps to resolve the issue.

Additional Resources

Frequently Asked Questions

Q: What happens if the company does not account for the damaged goods? A: If the company does not account for the damaged goods, it may lead to inaccurate financial records and potential financial losses.
Q: How do I determine the cost of the damaged laptops? A: To determine the cost of the damaged laptops, you need to multiply the cost per laptop by the number of damaged laptops.
Q: What if the company wants to return the damaged laptops to the supplier but the supplier refuses? A: If the supplier refuses to accept the return of the damaged laptops, the company needs to follow the supplier's return policy and warranty.