Get an answer from tutors to this homework question now: The current assets and
ID: 2387236 • Letter: G
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Get an answer from tutors to this homework question now:The current assets and liabilities sections of the balance sheet of Agincourt Company appear as follows.
AGINCOURT COMPANY
Balance Sheet (Partial)
December 31, 2010
Cash $40,000 Accounts payable $61,000
Accounts receivable $89,000 Notes payable 67,000
Less: Allowance for doubtful accounts 7,000
82,000 $128,000
Inventories 171,000
Prepaid expenses 9,000
$302,000
The following errors in the corporation's accounting have been discovered:
January 2011 cash disbursements entered as of December 2010 included payments of accounts payable in the amount of $35,000, on which a cash discount of 2% was taken.
The inventory included $27,000 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $10,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30.
Sales for the first four days in January 2011 in the amount of $30,000 were entered in the sales book as of December 31, 2010. Of these, $21,500 were sales on account and the remainder were cash sales.
Cash, not including cash sales, collected in January 2011 and entered as of December 31, 2010, totaled $35,324. Of this amount, $23,324 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.
Explanation / Answer
Balance Sheet partial Cash 35,324 Accounts receivable 75800 Inventories 161000 Prepaid expenses 9000 Total assets 281,124 Accounts payable 44000 Notes payable 67000 Workings Cash Opening balance 40,000 Add: payment wrongly entered (35000*98%) 34,300 Less: wrongly debited 35,324 Inventory 171000 Less: received on consignment 10000 161000 Accounts payable 61000 Add: goods recevived without invoice 17000 44000 Accounts receivable 80500 Less: Allowance for debts 7000 73500 Add: wrongly accounted(23324/98*100) 23800 97300 Less: wrongly accounted 21500 75800
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