Question - Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,995 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $109,060 as shown in the ledger.
The following information is available for your first year in business.
| (1) |
Collections from customers |
$263,340 |
| (2) |
Merchandise purchased |
425,600 |
| (3) |
Ending merchandise inventory |
119,700 |
| (4) |
Goods are marked to sell at 40% above cost |
Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.