AB Ltd. has MCC has prepared the Income statement including the following data (all sales are on
Question:
AB Ltd. has MCC has prepared the Income statement including the following data (all sales are on account):
Sales $80,000
Cost of Goods Sold $ 50,000
Gross Profit $ 25,000
Expenses $ 10,000
Net Profit $15,000
The comparative balance sheet shows the following data (by definition, accounts payable relates to merchandise purchases only):
End of Year Beginning of Year
Accounts Receivables (net) $7,000 $8,440
Inventory $3,000 $2,000
Prepaid Expenses $2,000 $1,000
Accounts Payable $2,720 $1,500
Required 1: What is the amount of Cash received from Customers? $
Required 2: What is the amount of Cash paid for merchandise purchase? $
2.
AB Ltd.'s bank statement for July shows a balance of $25,550 at July 31st.
Outstanding cheques at July 31st are $11,100
A deposit of $3025 made on July 30th is in transit and had not cleared the bank by July 31st.
An automatic payment for $11,100 was erroneously charged by the bank against your account while it belongs to another bank customer (bank error).
Required 1: After preparing the bank reconciliation what is the adjusted Bank Statement balance at month end to reflect this information? $
Required 2: After preparing the bank reconciliation what is the correct adjusted Cash balance in AB's books to reflect this information? $
Expert Answer:
To determine the amount of cash received from customers we need to calculate the change in accounts ... View the full answer
