Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $2,715

Question

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $2,715 per month, has just purchased a new Acura. You decided to test the accuracy of the accounts receivable balance of $212,770 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 $359,380 (2) Merchandise purchased 580,200 (3) Ending merchandise inventory 127,700 (4) Goods are marked to sell at 40% above cost

Explanation / Answer

Collections from customers                                                                            358,380 Merchandise purchased                                                                            579,200 Ending merchandise inventory                                                                            126,700 Goods are marked to sell at 40% above cost                                                                            810,880 Sales                                                                            810,880 Collections from customers                                                                            358,380 Accounts receivable ending balance                                                                            452,500 Accounts receivables as per ledger                                                                            211,770 Apparent shortage                                                                            240,730

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