Sunland Co. Balance Sheet (Partial) As of December 31, 2017 Cash $ 17,900 Accounts payable $ 29,500 Accounts receivable $ 39,600 Notes payable 15,400 Less: Allowance for doubtful accounts 3,200 36,400 Unearned revenue 3,800 Inventory 61,100 Total current liabilities $ 48,700 Prepaid expenses 7,400 Total current assets $ 122,800 The following errors in the corporation's accounting have been discovered: 1. Keane collected $ 5,200 on December 20, 2017 as a down payment for services to be performed in January, 2018. The company's controller recorded the amount as revenue. The inventory amount reported included $ 2,300 of merchandise that had been received on December 31, 2017 but for which no purchase invoices had been received or entered. Of this amount, $ 1,600 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 2. Sales for the first day in January 2018 in the amount of $ 11,100 were entered in the sales journal as of December 31, 2017. Of these, $ 7,000 were sales on account and the remainder were cash sales. 3. 4. Cash, collected in December 2017, but entered as received in January 2018 totaled $ 2,400. Of this amount, $2,254 was received on account after cash discounts of 2% had been deducted; the remainder was collected for cash sales.
Sunland Co. Balance Sheet (Partial) As of December 31, 2017 Cash $ 17,900 Accounts payable $ 29,500 Accounts receivable $ 39,600 Notes payable 15,400 Less: Allowance for doubtful accounts 3,200 36,400 Unearned revenue 3,800 Inventory 61,100 Total current liabilities $ 48,700 Prepaid expenses 7,400 Total current assets $ 122,800 The following errors in the corporation's accounting have been discovered: 1. Keane collected $ 5,200 on December 20, 2017 as a down payment for services to be performed in January, 2018. The company's controller recorded the amount as revenue. The inventory amount reported included $ 2,300 of merchandise that had been received on December 31, 2017 but for which no purchase invoices had been received or entered. Of this amount, $ 1,600 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 2. Sales for the first day in January 2018 in the amount of $ 11,100 were entered in the sales journal as of December 31, 2017. Of these, $ 7,000 were sales on account and the remainder were cash sales. 3. 4. Cash, collected in December 2017, but entered as received in January 2018 totaled $ 2,400. Of this amount, $2,254 was received on account after cash discounts of 2% had been deducted; the remainder was collected for cash sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Sunland Co.
Balance Sheet (Partial)
As of December 31, 2017
Cash
$ 17,900
Accounts payable
$ 29,500
Accounts receivable
$ 39,600
Notes payable
15,400
Less: Allowance for doubtful accounts
3,200
36,400
Unearned revenue
3,800
Inventory
61,100
Total current liabilities
$ 48,700
Prepaid expenses
7,400
Total current assets
$ 122,800
The following errors in the corporation's accounting have been discovered:
1.
Keane collected $ 5,200 on December 20, 2017 as a down payment for services to be performed in January, 2018. The
company's controller recorded the amount as revenue.
The inventory amount reported included $ 2,300 of merchandise that had been received on December 31, 2017 but for
which no purchase invoices had been received or entered. Of this amount, $ 1,600 had been received on consignment; the
2.
remainder was purchased f.o.b. destination, terms 2/10, n/30.
Sales for the first day in January 2018 in the amount of $ 11,100 were entered in the sales journal as of December 31, 2017.
Of these, $ 7,000 were sales on account and the remainder were cash sales.
3.
Cash, collected in December 2017, but entered as received in January 2018 totaled $ 2,400. Of this amount, $ 2,254 was
received on account after cash discounts of 2% had been deducted; the remainder was collected for cash sales.
4.
Transcribed Image Text:Cash of $ 4,000 received in January 2018 was entered as received in December 2017. This cash represented the proceeds of
5.
a bank loan that matures in July 2018.
January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $
6.
7,000, on which a cash discount of 1% was taken.
a1)
- Your answer is partially correct.
Calculate the following adjusted balances.
Cash
$4
19,130
Accounts Receivable
30,300
Inventory
59,500
Accounts Payable
Notes Payable
$
%24
%24
%24
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