Answer:
The net realizable value of the accounts receivable amounts to $613,690
Explanation:
NRV stands for Net Realizable value, which is defined as the cash amount that the firm expects to receive.
The net realizable value of the accounts receivable is computed as:
Net realizable value of the accounts receivable = Balance of Accounts Receivable - Allowance for Doubtful Accounts
where
Balance of Accounts Receivable amounts to $632,338
Allowance for Doubtful Accounts amounts to $18,648
Putting the values above:
Net realizable value of the accounts receivable = $632,338 - $18,648
Net realizable value of the accounts receivable = $613,690
Answer:
Balance sheet
Inventory - Understatement by $11,600
Owners equity - Understatement by $11,600
Income statement
Cost of goods sold - Overstatement by $11,600
Net income - Understatement by $11,600
Explanation:
The movement in an inventory account which is the difference between the opening and ending balances is a function of the purchases and the sales during the period.
This is captured in the equation below
Opening balance + purchases - cost of goods sold = ending balance
Hence an understatement of the ending balance would result in an overstatement of the cost of goods sold thus an understatement of the net income (and owner's equity).
The understatement in closing inventory balance is
= $378,500 - $366,900
= $11,600.
<em />I think it is C but don't quote me on it.
System theorists point out that the real problem in this example is dysfunctionality. Dysfunctionality is a way of providing a conflict in certain situations and that individual or the people involved in a situation are not harmonized that they are not able to maintain and function normally because of certain problems and lack of harmony.
