Gear Co.'s accounts payable balance at December 31, 2007 was $1,500,000 before considering the following transactions:
Goods were in transit from a vendor to Gear on December 31, 2007. The invoice price was $70,000, and the goods were shipped f.o.b. shipping point on December 29, 2007. The goods were received on January 4, 2008.
Goods shipped to Gear, f.o.b. shipping point on December 20, 2007, from a vendor were lost in transit. The invoice price was $50,000. On January 5, 2008, Gear filed a $50,000 claim against the common carrier.
In its December 31, 2007 balance sheet, Gear should report accounts payable of:
a. $1,620,000.
b. $1,570,000.
c. $1,550,000.
d. $1,500,000.