GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 4, Problem 4.16E
Analyzing the Effects of Errors on Financial Statement Items
Cohen & Boyd. Inc., publishers of movie and song trivia books, made the following errors in adjusting the accounts at year-end (December 31):
- a. Did not accrue $1,400 owed to the company by another company renting part of the building as a storage facility.
- b. Did not record $15,000
depreciation on the equipment costing $115.000. - c. Failed to adjust the Unearned Fee Revenue account to reflect that $1.500 was earned by the end of the year.
- d. Recorded a full year of accrued interest expense on a $17,000. 9 percent note payable that has been outstanding only since November 1.
- e. Failed to adjust Prepaid Insurance to reflect that $650 of insurance coverage has been used.
Required:
- 1. For each error, prepare (a) the
adjusting journal entry that was made, if any. and (b) the adjusting journal entry that should have been made at year-end. - 2. Using the following headings, indicate the effect of each error and the amount of the effect (that is. the difference between the entry that was or was not made and the entry that should have been made). Use O if the effect overstates the item, U if the effect understates the item, and NF. if there is no effect. (Reminder: Assets = Liabilities + Stockholders' Equity: Revenues - Expenses = Net Income; and Net Income accounts are closed to
Retained Earnings , a part of Stockholders' Equity.)
| Transaction | INCOME STATEMENT | |||||
| Assets | Liabilities | Stockholders’ Equity | Revenues | Expenses | Net Income | |
| a. | ||||||
| b. | ||||||
| c. | ||||||
| (etc.) | ||||||
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Analyzing the Effects of Errors on Financial Statement Items
E4-14
L02
Cohen & Boyd, Inc., publishers of movie and song trivia books, made the following errors in adjusting
the accounts at year-end (December 31):
a. Did not accrue $1,400 owed to the company by another company renting part of the building as a stor-
age facility.
b. Did not record $15,000 depreciation on the equipment costing $115,000.
c. Failed to adjust the Unearned Fee Revenue account to reflect that $1,500 was earned by the end of the
year.
d. Recorded a full year of accrued interest expense on a $17,000, 9 percent note payable that has been
outstanding only since November 1.
e. Failed to adjust Prepaid Insurance to reflect that $650 of insurance coverage has been used.
206
СНАРТER 4
Adjustments, Financial Statements, and the Quality of Earnings
Required:
1. For each error, prepare the adjusting journal entry (a) that was made, if any, and (b) that should have
been made at year-end.
2. Using the following headings,…
4. At the year-end of T Down & Co, an imbalance in the trial
balance was revealed which resulted in the creation of a
асcount
with
credit
balance of $1,040.
suspense
Investigations revealed the following errors.
a. A sale of goods on credit for $1,000 had been omitted from
the sales account.
a
b. Delivery and installation costs of $240 on a new item of
plant had been recorded as a revenue expense.
c. Cash discount of $150 on paying a supplier, JW, had been
taken, even though the payment was made outside the time
limit.
d. Inventory of stationery at the end of the period of $240 had
been ignored.
e. A purchase of raw materials of $350 had been recorded in
the purchases account as $850.
f. The purchase returns day book included a sales credit note
for $230 which had been entered correctly in the account of
the customer concerned, but included with purchase returns
in the nominal ledger.
Required
(a) Prepare journal entries to correct each of the above errors.
Narratives are not required.…
6.Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the bad debt expense for the year?
Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record
Group of answer choices
Chapter 4 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 4 - What is the purpose of recording adjusting...Ch. 4 - List the four types of adjusting entries, and give...Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain how the financial statements relate to...Ch. 4 - What is the equation for each of the following...Ch. 4 - Explain the effect of adjusting entries on cash.Ch. 4 - How is earnings per share computed and...Ch. 4 - Prob. 8QCh. 4 - What are the purposes for closing the books?Ch. 4 - Differentiate among (a) permanent, (b) temporary,...
Ch. 4 - Explain why the income statement accounts are...Ch. 4 - Prob. 12QCh. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - Prob. 3MCQCh. 4 - On June 1, 2016, Oakcrest Company signed a...Ch. 4 - Prob. 5MCQCh. 4 - An adjusted trial balance a. Shows the ending...Ch. 4 - JJ Company owns a building. Which of the following...Ch. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - If a company is successful in acquiring several...Ch. 4 - Preparing a Trial Balance Hagadorn Company has the...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Recording Adjusting Entries (Deferred Accounts) In...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Adjusting Entries (Accrued Accounts) In...Ch. 4 - Prob. 4.7MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.9MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.11MECh. 4 - Recording Closing Entries Refer to the adjusted...Ch. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Recording Adjusting Entries Diane Company...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Recording Adjusting Entries and Reporting Balances...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Seven Typical Adjusting Entries...Ch. 4 - Prob. 4.9ECh. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Prob. 4.13ECh. 4 - Determining Financial Statement Effects of...Ch. 4 - Inferring Transactions Deere Company is the...Ch. 4 - Analyzing the Effects of Errors on Financial...Ch. 4 - Prob. 4.17ECh. 4 - Recording the Effects of Adjusting Entries and...Ch. 4 - Reporting a Correct Income Statement with Earnings...Ch. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.21ECh. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.1PCh. 4 - Prob. 4.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Prob. 4.6PCh. 4 - Prob. 4.7PCh. 4 - Prob. 4.1APCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.4APCh. 4 - Determining Financial Statement Effects of...Ch. 4 - Prob. 4.6APCh. 4 - Prob. 4.7APCh. 4 - Prob. 4.1CONCh. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Comparing Companies within an Industry and Over...Ch. 4 - Prob. 4.4CPCh. 4 - Prob. 4.5CPCh. 4 - Prob. 4.6CPCh. 4 - Prob. 4.7CPCh. 4 - Prob. 4.8CPCh. 4 - Prob. 4.9CP
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