The current assets and current liabilities sections of the balance sheet of Carla Company appear as follows. CARLA COMPANY BALANCE SHEET (PARTIAL) DECEMBER 31, 2017 Cash $ 46,400 Accounts payable $ 66,820 Accounts receivable $90,900 Notes payable 72,040 Less: Allowance for doubtful accounts 7,920 82,980 $138,860 Inventory 170,340 Prepaid expenses 8,970 $308,690 The following errors in the corporations accounting have been discovered: 1. January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $39,700, on which a cash discount of 2% was taken. 2. The inventory included $29,650 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,570 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 3. Sales for the first four days in January 2018 in the amount of $28,600 were entered in the sales journal as of December 31, 2017. Of these, $22,130 were sales on account and the remainder were cash sales. 4. Cash, not including cash sales, collected in January 2018 and entered as of December 31, 2017, totaled $35,422. Of this amount, $23,422 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.

1. Calculate the following adjusted balances.

Cash -

Accounts Receivable -

Inventory -

Accounts Payable -

Notes Payable -

2. 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.)

3. State the net effect of your adjustments on Carla Companys retained earnings balance.