Marigold Company discovered the following errors made in January 2019. 1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310. 2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790. 3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.

Marigold Company discovered the following errors made in January 2019. 1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310. 2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790. 3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10P: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2...

See similar textbooks

Similar questions

Tech Support Services has the following unadjusted trial balance as of January 31, 2019: The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was overstated by 8,000. b. A cash receipt of 4,100 was posted as a debit to Cash of 1,400. c. A debit of 12,350 to Accounts Receivable was not posted. d. A return of 235 of defective supplies was erroneously posted as a 325 credit to Supplies. e. An insurance policy acquired at a cost of 3,000 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was overstated by 21,000. g. A credit of 3,450 in Accounts Payable was overlooked when the balance of the account was determined. h. A debit of 6,000 for a withdrawal by the owner was posted as a debit to Thad Engelberg, Capital. i. The balance of 28,350 in Advertising Expense was entered as 23,850 in the trial balance. j. Miscellaneous Expense, with a balance of 4,600, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of January 31, 2019. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800
The accounts in the ledger of Hickory Furniture Company as of December 31, 2019, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally omitted. Prepare an unadjusted trial balance, listing the accounts in their normal order and inserting the missing figure for cash.
At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.
Pharoah Company discovered the following errors made in January 2020. 1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310. 2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790. 3. The purchase of equipment on account for $480 was debited to Equipment $720 and credited to Acc
Sandhill Company discovered the following errors made in January 2020. 1. A payment of Salaries and Wages Expense of $360 was debited to Equipment and credited to Cash, both for $360. 2. A collection of $1,100 from a client on account was debited to Cash $110 and credited to Service Revenue $110. 3. The purchase of equipment on account for $270 was debited to Equipment $800 and credited to Accounts Payable $800. (a) Correct the errors by reversing the incorrect entry and preparing the correct entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. enter an account title to reverse the incorrect entry enter a debit amount enter a credit amount enter an account title to reverse the incorrect entry enter a debit amount enter a credit amount (To reverse the incorrect entry) enter an account title to record the…
These errors were discovered in the account of Golden Arches Company: Salaries payable amounting to P 34,000 was not recorded in 2021. Accrued vacation pay for the year 2021 for P 62,500 was not recorded due to lack of knowledge by the bookkeeper. Insurance for a 12-month period purchased on November 1, 2021 was charged to expenses in the amount of P 37,200. a. P 6,200 under b. P 65,500 over c. P 59,300 over d. P 64,500 under
Horace Culpepper, CA, was retained by Pulsar Cable to prepare financial statements for April 2020. Horace accumulated all the ledger balances per Pulsar’s records and found the following. Analyze errors and prepare correcting entries and trial balance. Pulsar Cable Trial Balance April 30, 2020 Debit Credit Cash £ 4,100 Accounts Receivable 3,200 Supplies 800 Equipment 10,800 Accumulated Depreciation—Equip. £ 1,350 Accounts Payable 2,100 Salaries and Wages Payable 700 Unearned Service Revenue 890 Share Capital—Ordinary 10,100 Retained Earnings 2,800 Service Revenue 5,650 Salaries and Wages Expense 3,300 Advertising Expense 600 Miscellaneous Expense 290 Depreciation Expense 500 £23,590 £23,590 Horace Culpepper found the following errors. 1. Cash received from a customer on account was recorded as £950 instead of £590. 2. A payment of £75 for advertising expense was entered as a debit to Miscellaneous Expense £75 and a credit to Cash £75. 3. The first salary payment this month was…
These errors were discovered in the account of Golden Arches Company: Salaries payable amounting to P 34,000 was not recorded in 2021. Accrued vacation pay for the year 2021 for P 62,500 was not recorded due to lack of knowledge by the bookkeeper. Insurance for a 12-month period purchased on November 1, 2021 was charged to expenses in the amount of P 37,200. P 64,500 under P 6,200 under P 65,500 over P 59,300 over
Below are three independent and unrelated errors. On December 31, 2017, Wolfe-Bache Corporation failed to accrue office supplies expense of $1,850. In January 2018, when it received the bill from its supplier, Wolfe-Bache made the following entry: Office supplies expense 1,850 Cash 1,850 On the last day of 2017, Midwest Importers received a $91,000 prepayment from a tenant for 2018 rent of a building. Midwest recorded the receipt as rent revenue. At the end of 2017, Dinkins-Lowery Corporation failed to accrue interest of $8,100 on a note receivable. At the beginning of 2018, when the company received the cash, it was recorded as interest revenue. Required:For each error:1. What would be the effect of each error on the income statement and the balance sheet in the 2017 financial statements?2. Prepare any journal entries each company should record in 2018 to correct the errors.
Lowell Corporation has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income statements prepared by the bookkeeper reported $29,000 net income for 2019 and $37,000 net income for 2020. Further examination of the records reveals that the following items were handled improperly. 1. Rent was received from a tenant in December 2019. The amount, $1,000, was recorded as revenue at that time even though the rental pertained to 2020. 2. Salaries and wages payable on December 31 have been consistently omitted from the records of that date and have been entered as expenses when paid in the following year. The amounts of the accruals recorded in this manner were: December 31, 2018 $1,100 December 31, 2019 1,200 December 31, 2020 940 3. Invoices for supplies purchased have been charged to expense…
As at 30 June 2019, the unadjusted trial balance of Green Ltd was noted as follows: Green Ltd TRIAL BALANCE AS AT 30 JUNE 2019 Accounts Debit ($) Credit ($) Cash at bank 8 985 Account receivables 31 200 Prepaid insurance 3 900 Office Supplies 4 680 Office equipment 14 100 Accumulated depreciation - equipment 2 850 Accounts payable 315 Salary payable Unearned service revenue 1 230 Loan payable 10 500 Capital 33 300 Drawings 60 000 Service revenue 159 270 Salary expenses 66 000 Depreciation expenses - equipment Miscellaneous expenses 18 600 TOTAL 207 465 207 465 The following additional information is available at the end of June for adjustments: A physical count of office supplies on 30 June shows $660 of unused supplies on hand Depreciation of the office equipment is 10% each year (straight line…