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1. 2. 3. Cash 4. Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid expenses The following errors in the corporation's accounting have been discovered: Current Assets Pharoah Company Balance Sheet (Partial) December 31, 2025 Cash Accounts Receivable $91,400 Less 8,290 Inventory Allowance for Doubtful Accounts Prepaid Expenses $43,100 January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $42,300, on which a cash discount of 2% was taken. The inventory included $31,310 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 83,110 Sales for the first four days in January 2026 in the amount of $31,970 were entered in the sales journal as of December 31, 2025. Of these, $21,740 were sales on account and the remainder were cash sales. 165,030 Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $34,344. Of this amount, $22,344 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. 9,460 $300,700 December 31, 2025 Asset Accounts payable Notes payable Pharoah Company Balance Sheet (Partial) $ $63,430 63,510 $126,940 F

1. 2. 3. Cash 4. Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid expenses The following errors in the corporation's accounting have been discovered: Current Assets Pharoah Company Balance Sheet (Partial) December 31, 2025 Cash Accounts Receivable $91,400 Less 8,290 Inventory Allowance for Doubtful Accounts Prepaid Expenses $43,100 January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $42,300, on which a cash discount of 2% was taken. The inventory included $31,310 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 83,110 Sales for the first four days in January 2026 in the amount of $31,970 were entered in the sales journal as of December 31, 2025. Of these, $21,740 were sales on account and the remainder were cash sales. 165,030 Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $34,344. Of this amount, $22,344 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. 9,460 $300,700 December 31, 2025 Asset Accounts payable Notes payable Pharoah Company Balance Sheet (Partial) $ $63,430 63,510 $126,940 F

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. 2. 3. Cash 4. Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid expenses The following errors in the corporation's accounting have been discovered: Current Assets Cash Accounts Receivable Pharoah Company Balance Sheet (Partial) December 31, 2025 Less $91,400 V: Allowance for Doubtful Accounts 8,290 Inventory Prepaid Expenses January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $42,300, on which a cash discount of 2% was taken. 4 Total Current Assets $43,100 The inventory included $31,310 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 83,110 Sales for the first four days in January 2026 in the amount of $31,970 were entered in the sales journal as of December 31, 2025. Of these, $21,740 were sales on account and the remainder were cash sales. 165,030 Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $34,344. Of this amount, $22,344 was received on account after cash discounts of 2% had been deducted: the remainder represented the proceeds of a bank loan. 9,460 $300,700 December 31, 2025 Asset Accounts payable Notes payable Pharoah Company Balance Sheet (Partial) $63,430 63,510 $126,940 $ $
Transcribed Image Text:1. 2. 3. Cash 4. Accounts receivable Less: Allowance for doubtful accounts Inventory Prepaid expenses The following errors in the corporation's accounting have been discovered: Current Assets Cash Accounts Receivable Pharoah Company Balance Sheet (Partial) December 31, 2025 Less $91,400 V: Allowance for Doubtful Accounts 8,290 Inventory Prepaid Expenses January 2026 cash disbursements entered as of December 2025 included payments of accounts payable in the amount of $42,300, on which a cash discount of 2% was taken. 4 Total Current Assets $43,100 The inventory included $31,310 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 83,110 Sales for the first four days in January 2026 in the amount of $31,970 were entered in the sales journal as of December 31, 2025. Of these, $21,740 were sales on account and the remainder were cash sales. 165,030 Cash, not including cash sales, collected in January 2026 and entered as of December 31, 2025, totaled $34,344. Of this amount, $22,344 was received on account after cash discounts of 2% had been deducted: the remainder represented the proceeds of a bank loan. 9,460 $300,700 December 31, 2025 Asset Accounts payable Notes payable Pharoah Company Balance Sheet (Partial) $63,430 63,510 $126,940 $ $
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