Question

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1.510 per month has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $85 550 as shown in the lediger The following information is available for your first year in business. (1) Collections from customers (2) Merchandise purchased (3) Ending merchandise inventory 14 Goods are marked to sell at 40% above cost $196,100 321.950 99.000 Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any parent shortages. Assume that all sales are made on account The ending balance of accounts receivable from customers 5 Apparent shortage

Answer 1

Merchandise purchased Ending merchandise inventory $ 321,950 $ 99,000 $ 222,950 Merchandise sold Sales Less: Collections from Customers $ Ending accounts receivable 312,130 ($222,950 * 140 % ) 196,100 $ 116,030 The ending balance of accounts receivable from customers Apparent shortage $ 116,030 30,480 ($116,030-$85,550)