Question

The current assets and current liabilities sections of the balance sheet of Tamarisk Company appear as follows.

TAMARISK COMPANY BALANCE SHEET (PARTIAL) DECEMBER 31, 2017
Cash				$ 40,200		Accounts payable		$  62,590
Accounts receivable		$90,900				Notes payable		71,980
Less: Allowance for doubtful accounts		7,330		83,570				$134,570
Inventory				172,890
Prepaid expenses				9,720
				$306,380

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 $41,300, on which a cash discount of 2% was taken.
2.		The inventory included $28,440 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $12,670 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 $30,480 were entered in the sales journal as of December 31, 2017. Of these, $23,360 were sales on account and the remainder were cash sales.
4.		Cash, not including cash sales, collected in January 2018 and entered as of December 31, 2017, totaled $35,324. Of this amount, $23,324 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.

(a1)

Calculate the following adjusted balances.

Cash		$
Accounts Receivable		$
Inventory		$
Accounts Payable		$
Notes Payable		$

Answer 1

Part a1

Cash balance	40200
Add: Cash disbursement after discount (41300*98%)	40474
Less: Cash sales in January (30480-23360)	-7120
Cash collected on account	-23324
Bank loan proceeds	-12670
Adjusted cash balance	$37560

Accounts receivable balance	83570
Add: Accounts reduced from January collection 23,324 / 98%	23800
Less: Accounts receivable in January	-23360
Adjusted accounts receivable	$84010

Inventories	172890
Less: Inventories received on consignment	-12670
Adjusted inventories	$160220

Accounts payable balance	62590
Add: Cash disbursements	41300
Purchase invoice omitted (28440-12670)	15770
Adjusted accounts payable	$119660

Notes payable balance	71980
Less: Proceeds of bank loan (35324-23324)	-12000
Adjusted Notes payable	$59980