The current assets and current liabilities sections of the balance sheet of Ivanhoe Company appear as follows.
Question:
The current assets and current liabilities sections of the balance sheet of Ivanhoe Company appear as follows.
IVANHOE COMPANY
BALANCE SHEET (PARTIAL)
DECEMBER 31, 2017
$130,500 Inventory 157,330 Prepaid expenses 8,110 $297,810
Cash | $42,800 | Accounts Payable | 64,090 | ||
Accounts Receivable | 98,100 | Notes Payable | 66,410 | ||
Less: allowance for doubtful accounts | 8,530 | 89,570 | |||
Inventory | 157,330 | ||||
Prepaid expenses | 8,110 | ||||
297,810 |
The following errors in the corporation’s accounting have been discovered:
1. January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $43,400, on which a cash discount of 2% was taken.
2. The inventory included $30,790 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $10,860 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30.
3. Sales for the first four days in January 2018 in the amount of $29,350 were entered in the sales journal as of December 31, 2017. Of these, $21,600 were sales on account and the remainder were cash sales.
4. Cash, not including cash sales, was collected in January 2018 and entered as of December 31, 2017, totaling $37,480. Of this amount, $25,480 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.
Calculate the following adjusted balances.
Cash | |
Accounts Receivable | |
Inventory | |
Accounts Payable | |
Notes Payable |
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer