When DeSoto Water Works purchased equipment at the end of 2020 at a cost of $64,000, the company debited Buildings and credited Cash $64,000. The error was discovered in 2021. Prepare the journal entry DeSoto will use to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record entry to correct error. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal

When DeSoto Water Works purchased equipment at the end of 2020 at a cost of $64,000, the company debited Buildings and credited Cash $64,000. The error was discovered in 2021. Prepare the journal entry DeSoto will use to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record entry to correct error. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal

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 8RE: At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a...

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The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.
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
Worksheet Victoria Company has the following account balances on December 31, 2019, prior to any adjustments: Additional adjustment information: (a) depreciation on buildings, 1,100; on equipment, 600; (b) bad debts expense, 240; (c) interest accumulated but not paid: on note payable, 50; on mortgage payable, 530 (this interest is due during the next accounting period); (d) insurance expired, 175; (e) salaries accrued but not paid 370; (f) rent was collected in advance and the performance obligation is now satisfied, 800; (g) office supplies cm hand at year-end, 230 (expensed when originally purchased earlier in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2020. Required: 1. Transfer the account balances to a 10-column worksheet and prepare a trial balance. 2. Prepare the adjusting entries in the general journal and complete the worksheet. 3. Prepare the companys income statement, retained earnings statement, and balance sheet. 4. Prepare closing entries in the general journal.
The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.
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.
Do not copy from bartleby. Otherwisw i will give you dislike When DeSoto Water Works purchased equipment at the end of 2020 at a cost of $64,000, the company debited Buildings and credited Cash $64,000. The error was discovered in 2021. Prepare the journal entry DeSoto will use to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record entry to correct error. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal
On December 12, 2024, Park Electronics received $24,000 from a customer toward a cash sale of $240,000 of diodes to be completed on January 16, 2025. What journal entries should Park record on December 12 and January 16? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
During the last week of 2020, Grandma’s House Inc. received a $96,000 prepayment for 2021 rent of a building from one of its tenants, Red-Riding-Hood. Grandma’s House recorded the receipt as rent revenue. The error was discovered midway through 2021. What journal entry should Grandma’s House record in 2021 to correct the error? Group of answer choices dr. Rent Expense $48,000; cr. Revenue $48,000. dr. Deferred Revenue $96,000; cr. Revenue $96,000. dr. Retained earnings $96,000; cr. Revenue $96,000. None of the options listed. dr. Retained earnings $96,000; cr. Deferred revenue $48,000; cr. Revenue $48,000.
At the end of 2019, Framber Company received $8000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.
Near the end of its first year of operations, December 31, 2021, Vaughn Designs Ltd. approached the local bank for a $ 19,400 loan and was asked to submit financial statements prepared on an accrual basis. Although the company kept no formal accounting records, it did maintain a record of cash receipts and payments. The following information is available for the year ended December 31: Additional information: 1. Fees from design work earned but not yet collected amounted to $ 2,430. 2. The equipment was purchased at the beginning of January and has an estimated six-year useful life. The company uses straight-line depreciation. 3. Supplies on hand on December 31 were $ 1,230. 4. Rent payments included a $ 1,350 per month rental fee and a $ 1,880 deposit that is refundable at the end of the two-year lease. (Hint: Use the Prepaid Rent account for the refundable deposit.) 5. The insurance was purchased on February 1 for a one-year period expiring on January 31, 2022.…