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The current assets and current liabilities sections of the balance sheet of Nash Company appear as follows. Nash Company Balance Sheet (Partial) December 31,
The current assets and current liabilities sections of the balance sheet of Nash Company appear as follows. Nash Company Balance Sheet (Partial) December 31, 2025 Cash $47,800 Accounts payable $64,720 Accounts receivable $91,000 Notes payable 67,890 State the net effect of your adjustments on Nash Company's retained earnings balance. Less: Allowance for doubtful accounts 7,810 83,190 $132,610 Inventory 175,740 Decrease to retained earnings $ Prepaid expenses 9,770 $316,500 The following errors in the corporation's accounting have been discovered: 1. 2. 3. January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $44,100, on which a cash discount of 2% was taken. The inventory included $30,240 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $10,320 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 2026 in the amount of $31,880 were entered in the sales journal as of December 31, 2025. Of these, $22,420 were sales on account and the remainder were cash sales. 4. Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $34,932. Of this amount, $22,932 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.
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