Joe Edmonds, CPA, was retained by Clark Cable Inc. to prepare financial statements for April 2011. Edmonds
Question:
Joe Edmonds reviewed the records and found the following errors.
1. Cash received from a customer on account was recorded as $960 instead of $690.
2. A payment of $65 for advertising expense was entered as a debit to Miscellaneous Expense $65 and a credit to Cash $65.
3. The first salary payment this month was for $1,900, which included $700 of salaries payable on March 31. The payment was recorded as a debit to Salaries Expense $1,900 and a credit to Cash $1,900. (No reversing entries were made on April 1.)
4. The purchase on account of a printer costing $290 was recorded as a debit to Supplies and a credit to Accounts Payable for $290.
5. A cash payment of repair expense on equipment for $95 was recorded as a debit to Equipment $59 and a credit to Cash $59.
Instructions
(a) Prepare an analysis of each error showing
(1) The incorrect entry,
(2) The correct entry, and
(3) The correcting entry. Items 4 and 5 occurred on April 30, 2011.
(b) Prepare a correct trialbalance.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Accounting
ISBN: 978-0470507018
7th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso