The income statement prepared by Grayling Company for the month of March showed net income of $18,500. In recording the transactions of the month, however, the accountant had made some errors. Study the following list of March transac¬

tions and identify any which were incorrectly recorded. Also give the journal entry as it should have been made. Finally, compute the correct amount of net income for the month of March. LO8 a Earned a commission of $2,500 by selling a residence for a client. Commission to be received in 60 days. Recorded by debiting Commissions Earned and crediting Ac¬

counts Receivable.

b A payment of $250 for newspaper advertising was recorded by debiting Advertising Expense and crediting Accounts Receivable, c Received but did not pay a bill of $285 for March telephone service. Recorded by debiting Telephone Expense and crediting Commissions Earned, d Made an error in computing depreciation on the building for March. Recorded as

$25. Should have been $250.

e Recorded the withdrawal of $1,600 by the owner, Howard Grayling, by debiting Salaries Expense and crediting Cash.