The following information from Tiny Company's first year of operations is to be used in testing the accuracy of Accounts Receivable. The December 31, 2008, balance is $28,300.
Compute the balance that Accounts Receivable should show and determine the amount of any shortage or overage.
For your convenience, I have attached a formatted MS Excel spreadsheet containing the text below.
Calculate Cost of Goods Sold (COGS) from the provided information:
Merchandise purchased $74,000
Ending inventory $31,500
Cost of Goods sold (COGS) $42,500
Calculate Sales Revenue, which from the provided information (d) is 60% above COGS
Total Sales Revenue = COGS + .60(COGS)
Excel spreadsheet shows how to compute the accounts receivable balance and determine shortages for Tiny Company.