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ACC 537 Week 1 Textbook Problems P7 1Francis
Equipment Co
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P7-1 (Determine Proper Cash Balance) Francis Equipment Co.
closes its books regularly on December 31, but at the end of 2014
it held its cash book open so that a more favorable balance sheet
could be prepared for credit purposes. Cash receipts and
disbursements for the first 10 days of January were recorded as
December transactions. The information is given below.
1. January cash receipts recorded in the December cash book
totaled $45,640 , of which $28,000 represents cash sales, and
$17,640 represents collections on account for which cash
discounts of $360 were given.
2. January cash disbursements recorded in the December check
register liquidated accounts payable of $22,450 on which
discounts of $250 were taken.
3. The ledger has not been closed for 2014.
4. The amount shown as inventory was determined by physical
count on December 31, 2014. The company uses the periodic
method of inventory.
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