The current assets and current liabilities sections of the balance she


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The current assets and current liabilities sections of the balance sheet of Pearl Company appear as follows. Cash$ 48,700 Accounts payable$ 57,640 Accounts receivable $92,700 Notes payable 61,270 Less: Allowance for doubtful accounts 7,640 85,060 $

Sale price $15.00 Regular price $30.00

The current assets and current liabilities sections of the balance sheet of Pearl Company appear as follows.
Cash$ 48,700 Accounts payable$ 57,640

Accounts receivable $92,700 Notes payable 61,270

Less: Allowance for doubtful accounts 7,640 85,060 $118,910

Inventory 183,410

Prepaid expenses 8,130

$325,300

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

1.January 2018 cash disbursements entered as of December 2017 included payments of accounts payable in the amount of $43,800, on which a cash discount of 2% was taken

.2.The inventory included $30,800 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $12,110 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30

.3.Sales for the first four days in January 2018 in the amount of $32,000 were entered in the sales journal as of December 31, 2017. Of these, $20,030 were sales on account and the remainder were cash sales.

4.Cash, not including cash sales, collected in January 2018 and entered as of December 31, 2017, totaled $34,834. Of this amount, $22,834 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.

If the net effect of the adjustment decreased the retained earnings balance, how much did it decrease by?

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