Concept explainers
Following is a
- 1. Think about where these amounts might have been put, think about what accounts are missing, and use T accounts to solve the problems.
- 2. Prepare a corrected trial balance.
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College Accounting (Book Only): A Career Approach
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- As the manager of the accounts receivable department for Beavis Leather Goods, Ltd., you recently noticed that Kelly Collins, your accounts receivable clerk who is paid $12000 per month, has been wearing unusually tasteful and expensive clothing. (This is Beavis's first year in business.) This morning, Collins drove up to work in a brand new Lexus. Naturally suspicious by nature, you decide to test the accuracy of the accounts receivable balance of $1,320,000 as shown in the ledger. The following information is available for your first year (precisely 9 months ended September 30, 2010) in business. Collections from customers .......................$1,980,000 Merchandise purchased................................3,600,000 Ending merchandise inventory........................900,000 Goods are marked to sell at 40% above cost. Please provide me a long detailed draft of memo dated on October 3, 20x7 to Jay Corales, the branch manager explaining the fact in this situation. Please make the…arrow_forwardAs the manager of the accounts receivable department for Beavis Leather Goods, Ltd., you recently noticed that Kelly Collins, your accounts receivable clerk who is paid $12000 per month, has been wearing unusually tasteful and expensive clothing. (This is Beavis's first year in business.) This morning, Collins drove up to work in a brand new Lexus. Naturally suspicious by nature, you decide to test the accuracy of the accounts receivable balance of $1,320,000 as shown in the ledger. The following information is available for your first year (precisely 9 months ended September 30, 2010) in business. Collections from customers .......................$1,980,000 Merchandise purchased................................3,600,000 Ending merchandise inventory........................900,000 Goods are marked to sell at 40% above cost. Assuming all sales were made on account, compute the ending balance that should appear in the ledger, noting any apparent shortage.arrow_forwardAs the manager of the accounts receivable department for Beavis Leather Goods, Ltd., you recently noticed that Kelly Collins, your accounts receivable clerk who is paid $12000 per month, has been wearing unusually tasteful and expensive clothing. (This is Beavis's first year in business.) This morning, Collins drove up to work in a brand new Lexus. Naturally suspicious by nature, you decide to test the accuracy of the accounts receivable balance of $1,320,000 as shown in the ledger. The following information is available for your first year (precisely 9 months ended September 30, 2010) in business. Collections from customers .......................$1,980,000 Merchandise purchased................................3,600,000 Ending merchandise inventory........................900,000 Goods are marked to sell at 40% above cost. Please draft a memo dated on October 3, 20x7 to Jay Corales, the branch manager explaining the fact in this situation. Remember that this problem is serious and you…arrow_forward
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- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub