The substantiate the existence of the accounts receivable balances as at December 31, 2014 of Lucrative Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation requests to customers. Below (on the picture) is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method.

Name of Customer Balance Per Books Comments from Audit Findings Customers Cruz $50,000 Returned goods were $30,000 was returned on received January 5, January 2, 2015. Correct 2015. balance is $20,000. Frias $10,000 Your CM representing The CM was taken up by price adjustment dated Lucrative in 2015. December 29,2014 cancels this. Lazo $48.000 You have overpriced us The complaint is valid. by $50. Correct price should be $100. Sia $37,500 We received the gods Term is shipping point. only on January 5, 2015. Shipped in 2014. Yao $45,000 Balance was offset by Lucrative credited our December shipment accounts payable for of your raw materials. $45,000 to record purchases. Yao is a supplier