The current assets and current liabilities sections of the balance sheet of Pharoah Company appear as follows. PHAROAH COMPANY BALANCE SHEET (PARTIAL) DECEMBER 31, 2020 Cash $ 40,900 Accounts receivable $93,700 Accounts payable Notes payable $ 62,500 64,780 Less: Allowance for doubtful accounts 7,180 86,520 $127,280 Inventory 156,960 Prepaid expenses 8,200 $292,580 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 $42,200,bn which a cash discount of 2% was taken. The inventory included $30,510 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $12,630 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 $31.270 were entered in the sales journal as of December 31, 2020. Of these, $20,620 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 $33,462. Of this amount, $21,462 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. Calculate the following adjusted balances. Cash Accounts Receivable Inventory Accounts Payable Notes Payable $ Restate the current assets and current liabilities sections of the balance sheet in accordance with good accounting practice. (Assume that both accounts receivable and accounts payable are recorded gross.) (List Current Assets in order of liquidity.) PHAROAH COMPANY Balance Sheet (Partial) Asset Liabilities and Stockholders' Equity $ State the net effect of your adjustments on Pharoah Company's retained earnings balance. to retained earnings