On December 12, 2021, an equity investment costing $80,000 was sold for $100,000. The investment was carried
Question:
On December 12, 2021, an equity investment costing $80,000 was sold for $100,000. The investment was carried in the balance sheet at $75,000, and was accounted for under the equity method. An error was made in which the total of the sale proceeds was credited to the investment account.
Required:
1. Prepare the journal entry to correct the error assuming it is discovered before the books are adjusted or closed in 2021.
2. Prepare the journal entry to correct the error assuming it is not discovered until early 2022.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Requirement 1 Error discovered before the books are adjusted or clos...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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