Blossom Co. Balance Sheet (Partial) As of December 31, 2017 Cash $19,100 Accounts payable $28,400 Accounts...

Blossom Co. Balance Sheet (Partial) As of December 31, 2017
Cash		$19,100	Accounts payable	$28,400
Accounts receivable	$38,200		Notes payable	14,000
Less: Allowance for doubtful accounts	2,100	36,100	Unearned revenue	2,800
Inventory		61,500	Total current liabilities	$45,200
Prepaid expenses		6,100
Total current assets		$122,800

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

1.		Keane collected $4,700 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 $2,200 of merchandise that had been received on December 31, 2017 but for which no purchase invoices had been received or entered. Of this amount, $1,000 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 $11,400 were entered in the sales journal as of December 31, 2017. Of these, $7,300 were sales on account and the remainder were cash sales.
4.		Cash, collected in December 2017, but entered as received in January 2018 totaled $2,900. Of this amount, $2,646 was received on account after cash discounts of 2% had been deducted; the remainder was collected for cash sales.
5.		Cash of $4,300 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 $8,200, on which a cash discount of 1% was taken.

(a1)

Calculate the following adjusted balances.

Cash		$enter a dollar amount
Accounts Receivable		$enter a dollar amount
Inventory		$enter a dollar amount
Accounts Payable		$enter a dollar amount
Notes Payable		$enter a dollar amount
Unearned Revenue		$enter a dollar amount

Solutions

Expert Solution

Cash:
Calculate the adjusted balance of cash as shown below:
Details	Error Number	Amount
Unadjusted cash balance		19100
Add: Cash received on account after cash discounts	4	2900
Add: Wrong posting of cash disbursement to accounts payable
(8200-(8200-1%)	6	8118
Total		30118
Less: Wrong posting of cash sales	3
11400-7300		4100
Less: Wrong posti, of receipt of cash representing proceeds of loan	5	4300
Adjusted balance of cash		21718

Thus. the adjusted balance of cash is	21718

Accounts Receivable:
Calculate the adjusted balance of accounts receivable as shown below:
Details	Error Number	Amount
Unadjusted accounts receivable balance		38200
Less: Wrong posting of credit sales	3	7300
Less: Receipt of cash on account after discount
2646*(100/(100-2))	4	2700
Adjusted balance of accounts receivable		28200


Thus. the adjusted balance of accounts receivable is	28200

Inventory
Calculate the adjusted balance of Inventory as shown below:
Details	Error Number	Amount
Unadjusted inventory balance		61500
Less: Inventory received on consignment	2	1000
Adjusted Balance of inventory		60500

Thus, Adjusted Balance of inventory is	60500


Accounts Payable
Calculate the adjusted balance of Accounts Payable as shown below:
Details	Error Number	Amount
Unadjusted accounts Payable Balance		28400
Add: Purchase of inventory on account (2200-1000)	2	1200
Add: Wrong posting of cash disbursement to accounts payable	6	8200
Adjusted Balance of Accounts Payable		37800

Thus, Adjusted Balance of Accounts Payable is	37800


Notes Payable
Calculate the adjusted balance of Notes Payable as shown below:
Details	Error Number	Amount
Unadjusted notes Payable Balance		14000
Less: Wrong posting of receipt of cash representing proceeds of loan	5	4300
Adjusted Balance of Notes Payable		9700

Thus, Adjusted Balance of Notes Payable is	9700


Unearned Revenue
Calculate the adjusted balance of Unearned Revenue as shown below:
Details	Error Number	Amount
Unadjusted notes Unearned Revenue		2800
Add: Receipt of down payment for services to be performed	1	4700
Adjusted Balance of Unearned Revenue		7500

Thus, Adjusted Balance of Unearned Revenue is	7500

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