Question

Sheridan Co. Balance Sheet (Partial) As of December 31, 2017
Cash				$18,100		Accounts payable		$27,500
Accounts receivable		$39,100				Notes payable		13,300
Less: Allowance for doubtful accounts		2,400		36,700		Unearned revenue		3,300
Inventory				61,600		Total current liabilities		$44,100
Prepaid expenses				7,400
Total current assets				$123,800

The following errors in the corporation’s accounting have been discovered:

1.		Keane collected $3,600 on December 20, 2017 as a down payment for services to be performed in January, 2018. The company’s controller recorded the amount as revenue.
2.		The inventory amount reported included $4,500 of merchandise that had been received on December 31, 2017 but for which no purchase invoices had been received or entered. Of this amount, $1,100 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30.
3.		Sales for the first day in January 2018 in the amount of $11,500 were entered in the sales journal as of December 31, 2017. Of these, $6,000 were sales on account and the remainder were cash sales.
4.		Cash, collected in December 2017, but entered as received in January 2018 totaled $3,000. Of this amount, $2,744 was received on account after cash discounts of 2% had been deducted; the remainder was collected for cash sales.
5.		Cash of $4,500 received in January 2018 was entered as received in December 2017. This cash represented the proceeds of a bank loan that matures in July 2018.
6.		January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $6,000, on which a cash discount of 1% was taken.

State the net effect of your adjustments on Sheridan’s retained earnings balance.

select the effect to retained earnings

$enter the net effect of the adjustments in dollars

PLEASE SHOW HOW YOU GOT AMOUNT THANK YOU.

Answer 1