+ Chapter 5 Homework Question 6 of 6

Chapter 5 Homework Question 6 of 6 The current assets and current liabilities sections of the balance sheet of Flounder Company appear as fol lows. FLOUNDER COMPANY BALANCE SHEET (PARTIAL) DECEMBER 2020 Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid expenses Accounts payable Notes payable $91,400 8,290 $ 43,100 83,110 165,030 $300,700 $ 63,430 63,510 $126,940 The following errors in the corporation's accounting have been discovered: 1. 2. 3. 4. January 2021 cash disbursements entered as of December 2020 included payments of accounts payable in the amount of $42,300, on which a cash discount of 2% was taken. The inventory included $31,310 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. Sales for the first four days in January 2021 in the amount of $31,970 were entered in the sales journal as of December 31, 2020. Of these, $21,740 were sales on account and the remainder were cash sales. Cash, not including cash sales, collected in January 2021 and entered as of December 31, 2020, totaled $34,344. Of this amount, $22,344 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.