Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $3,615

Question

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $3,615 per month, has just purchased a new Acura. You decided to test the accuracy of the accounts receivable balance of $281,970 as shown in the ledger.

The following information is available for your first year in business.

Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

(1) Collections from customers $477,180 (2) Merchandise purchased 771,200 (3) Ending merchandise inventory 168,700 (4) Goods are marked to sell at 40% above cost

Explanation / Answer

Merchandise purchased 771,200 Less: Ending merchandise inventory 168,700 cost of goods sold 602500 Add: Margin 40% 241000 Total Sales 843500 Less: Collections from customers 477180 The ending balance of accounts receivable from customers $366320 Less: current ledger balance of accounts receivable 281970 Apparent shortage $84350

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