E5-9B(Current Assets and Current Liabilities) The current assets and liabilities sections of the balance sheet of Cooper Company appear as follows. COOPER COMPANY, BALANCESHEET(PARTIAL), DECEMBER31, 2012. Cash $100,000, Accounts receivable $222,500, Less: Allowance for doubtful accounts 17,500, 205,000, Inventories 427,500, Prepaid expenses 22,500, $755,000. Accounts payables $152,500, Notes payables 167,500, $320,000. The following errors in the corporations accounting have been discovered: 1. The inventory included $67,500 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $30,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 2. January 2013 cash disbursements entered as of December 2012 included payments of accounts payable in the amount of $97,500, on which a cash discount of 2% was taken. 3. Cash, not including cash sales, collected in January 2013 and entered as of December 31, 2012, totaled $88,310. Of this amount, $58,310 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. 4. Sales for the first four days in January 2013 in the amount of $75,000 were entered in the sales book as of December 31, 2012. Of these, $53,750 were sales on account, and the remainder were cash sales. Instructions: (a) Restate the current assets and liabilities sections of the balance sheet in accordance with good ac- counting practice. (Assume that both accounts receivable and accounts payable are recorded gross.) (b) State the net effect of your adjustments on Cooper Companys retained earnings balance