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Answered: - Deficiencies and recommendation for (1) Customer have 30 d


Deficiencies and recommendation for (1) Customer have 30 days to pay invoices, but most take advantage of the 2% discount offered for payment within 10 days. A sample of five year-end balances was tested, and all payment were received subsequent to year-end, so accounts receivable were reasonable at year-end.

(2) On Jan 2, 2016 goods related to a sale made on Dec 29, 2015 were destroyed in a transport accident. The goods were sold FOB shipping point and the customer is refusing to pay for the goods. The goods were valued at $200, 000.

 


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