Case 4-2 Purchases discounts and accounts payable The Laurel Co. is owned and operated by Paul Laurel. The following is an excerpt from a conversation between Paul Laurel and Maria Fuller, the chief accountant for Laurel Co. Paul: Maria, Ive got a question about this recent balance sheet. Maria: Sure, whats your question? Paul: Well, as you know, Im applying for a bank loan to finance our new store in Clinton, and I noticed that the accounts payable are listed as $180,000. Maria: Thats right. Approximately $150,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Paul: Thats what I thought. But we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Maria: Thats right. I cant remember the last time we missed a discount. Paul: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Lets list the accounts payable due suppliers as $147,000, rather than $150,000. Every little bit helps. You never know. It might make the difference between getting the loan and not. How would you respond to Paul Laurels request?