Use the information to answer the given question. RECEIPTS AND PAYMENTS ACCOUNT: \(\begin{array}{c|c} & & N & & N \\ \hline \text{Balance - 1st January} & 2...

Answer Details

To determine the amount owing to Bar creditors, we need to look at the change in the balance of Bar supplies from the beginning to the end of the accounting period. On January 1, the balance of Bar supplies was N2,850. During the accounting period, receipts from the Bar were N4,500 and additional Bar supplies were purchased for N3,200. This gives a total of N7,700. However, the balance of Bar supplies at the end of the period was N5,600. Therefore, the amount of Bar supplies used during the period was N2,100 (N7,700 - N5,600). This represents the cost of the Bar supplies consumed during the period. Since the balance of Bar supplies at the beginning of the period was N2,850, the total cost of Bar supplies for the period was N4,950 (N2,850 + N2,100). The amount owing to Bar creditors is the cost of the Bar supplies consumed during the period minus any payments made to Bar creditors during the period. The information provided does not include any payments made to Bar creditors, so the amount owing is N4,950. Therefore, the answer is option (A) N8,450 is incorrect. The correct answer is option (B) N6,050.