The following errors took place in journalizing and posting transactions: a. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. b. Dividends of $10,000 were recorded as a debit to Wages Expense and a credit to Cash. Journalize the entries to correct the errors. Omit explanations.

The following errors took place in journalizing and posting transactions: a. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. b. Dividends of $10,000 were recorded as a debit to Wages Expense and a credit to Cash. Journalize the entries to correct the errors. Omit explanations.

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter2: Analyzing Transactions

Section: Chapter Questions

Problem 2.22EX

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A 250 payment for salaries expense was incorrectly journalized and posted as a debit to Salaries Expense for 2,500 and a credit to Cash for 2,500. Using the one-step method, how would the entry be corrected? a. Cash2,500 Salaries Expense2,500 b. Salaries Expense250 Cash250 c. Cash2,250 Salaries Expense2,250 d. Salaries Expense2,250 Cash2,250
Cornerstone Exercise 2-23 Debit and Credit Procedures Refer ID the accounts listed below. a. Accounts Payable e. Equipment b. Accounts Receivable f. Common Stock c. Retained Earnings g. Salary Expense d. Sales h. Repair Expense Required: For each of the acmums1 complete the following table by entering the normal balance of the account (debit or credit) and the word increase or decrease in the debit and credit columns.
Effects of transactions on Accounting equation On Time Delivery Service had the following selected transactions during November: 1. Received cash from issuance of common stock, $75,000. 2. Paid rent for November, $5000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (9), in a vertical column, and inserting at the right of each number the appropriate letter from he following list: a. Increase in an asset, decrease in another asset. h. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders’ equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders equity.
Analyze Trusty Companys trial balance and the additional information provided to determine the following: A. what is causing the trial balance to be out of balance B. any other errors that require corrections that are identified during your analysis C. the effect (if any) that correcting the errors will have on the accounting equation A review of transactions revealed the following facts: A service fee of $18,000 was earned (but not yet collected) by the end of the period but was accidentally not recorded as revenue at that time. A transposition error occurred when transferring the account balances from the ledger to the trial balance. Salaries expense should have been listed on the trial balance as $64,500 but was inadvertently recorded as $46,500. Two machines that cost $9,000 each were purchased on account but were not recorded in company accounting records.
Exercise 2-54 Effect of Errors on a Trial Balance The bookkeeper for Riley Inc. made the following errors: A cash purchase of supplies of $348 was recorded as a debit to Supplies for $384 and a credit to Cash of $384. A cash sale 0133.128 was recorded as a debit to Cash of $3,128 and a credit to Sales of $53,182. A purchase of equipment was recorded once in the journal and posted twice to the ledger. Cash paid for salaries of $5,270 was recorded as a debit to Salaries Expense of $5,270 and a credit to Accounts Payable of $5,210. A credit sale of $1600 was recorded as a credit In Sales Revenue of $1,1500; however the debit posting to Accounts Receivable was unfilled. Required: Indicate whether or not the trial balance will balance after the error. If the trial balance will not Balance indicate the direction of the misstatement for any effected account (such as Cash will be overstated by $50).