Question

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,425 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $86,100 as shown in the ledger. The following information is available for your first year in business. (1) Collections from customers (2) Merchandise purchased (3) Ending merchandise inventory (4) Goods are marked to sell at 40% above cost $197,200 321,300 98,850 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. The ending balance of accounts receivable from customers ta $ Apparent shortage ta

Answer 1

Cost of goods sold = opening merchandise inventory + merchandise purchased − Ending merchandise inventory

= 0 + 321300 - 98850 = $222450

Sales = Cost of goods sold + (cost of goods sold * 40%)

= 222450 + (222450*40%) = $311430

Ending Accounts Receivable = Sales − Collection from customers

= 311430 - 197200 = $114230

Apparent Shortage = (Closing balance of Accounts − Accounts balance in ledger)​

= 114230 - 86100

= $28130