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The current assets and liabilities sections of the balance sheet of Agincourt Company appear as follows.

AGINCOURT COMPANY

Balance Sheet (Partial)

December 31, 2010

Cash $40,000 Accounts payable $61,000

Accounts receivable $89,000 Notes payable 67,000

Less: Allowance for doubtful accounts 7,000

82,000 $128,000

Inventories 171,000

Prepaid expenses 9,000

$302,000

The following errors in the corporation’s accounting have been discovered:

January 2011 cash disbursements entered as of December 2010 included payments of accounts payable in the amount of $35,000, on which a cash discount of 2% was taken.

The inventory included $27,000 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $10,000 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30.

Sales for the first four days in January 2011 in the amount of $30,000 were entered in the sales book as of December 31, 2010. Of these, $21,500 were sales on account and the remainder were cash sales.

Cash, not including cash sales, collected in January 2011 and entered as of December 31, 2010, totaled $35,324. Of this amount, $23,324 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.