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Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000.  Further, you know that the audited balance as of 12/31/2019 was $8,462,000.  You also verified cash deposits from customers through a review of the bank account.  Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000.  Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above?

Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000.  Further, you know that the audited balance as of 12/31/2019 was $8,462,000.  You also verified cash deposits from customers through a review of the bank account.  Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000.  Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000.  Further, you know that the audited balance as of 12/31/2019 was $8,462,000.  You also verified cash deposits from customers through a review of the bank account.  Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000. 

Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above?

1. $38,500,000

2. $41,000,000

3. $39,762,000

4. $39,100,000

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