Question

Confirmation replies:

1.  “The balance of $120,000 is incorrect because we paid that amount in full on December 31, 2019.”  Follow-up:  An analysis of the cash receipts journal revealed that the check had been received in the mail on January 9, 2020.

2.  “Of the balance of $30,000, $330 is incorrect because on December 19 we returned a printer when we found that we didn’t need it.  We ordered it in the middle of November when we had anticipated a need for it.  When we received the printer, we realized it was unnecessary and returned it unopened.”

Follow-up:  An analysis of the transaction revealed that it was received by your client prior to December 31, 2019 but they have not yet processed the credit.

3.  “The balance of $214,400 is correct, and we paid it on January 5, 2020.”  Follow-up:  An analysis of the cash receipts journal revealed that the check had been received on January 10, 2020..

4.  “Of the balance of $130,000, $10,000 is incorrect because it represents goods that we didn’t receive until January 5, 2020.”  Follow-up:  Inspection of shipping records reveals that the item was shipped on December 31, 2019 fob shipping point.

5.   “Of the account’s $18,000 balance, we only owe $17,460 and the $540 (3% of the total) remains unpaid because the Keystone salesperson told us that she would be able to obtain a “special” discount beyond the normal.”   Follow-up:  While inspection of the sales agreement indicated no such discount arrangement, discussions with Carter Addison (controller) and Joshua Caleb (president) indicated that the salesperson had inappropriately granted such a discount to the client.  On January 15, 2020, they processed the discount and credited the account for $540.

Conf #	Book Value	Audited Value	Difference
1
2
3
4
5

Answer 1

Answer

As per given Question

SL.NO BOOK VALUE AUDITED VALUE MISSTATMENT EXPLANATION The Book value is corect because the cash receipt was not 1,20,000 1,20,000 received prior to year end. 30,000 29,670 330 The return shouls have been the dates of December 31 2,14,000 the balance is correct because the payment was made and received after year end. 2,14,000 1,30,000 1,20,000 Because a portion of the delivery was subsequent to year end 10,000 it should not be recorded until 2016 Because only 1746 will be received the adjustment should be 540 made in the period the sale is recorded. 18,000 17.460

Thank you for given Question.....kindly rate....it helps me a lot