6.

For 2, vacation expense is not an option.

You have been engaged to review the financial statements of Bridgeport Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows. 1. Year-end wages payable as of the end of the current year of $3,510 were not recorded because the bookkeeper thought that "they were immaterial." 2. Accrued vacation pay for the current year of $33,300 was not recorded because the bookkeeper "never heard that you had to do it." 3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,652 because "the amount of the check is about the same every year." 4. Reported sales revenue for the year is $2,021,420. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state's Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that "the sales tax is a selling expense." At the end of the current year, the balance in the Sales Tax Expense account is $97,820. 1. Salaries and Wages Expense 3510 Salaries and Wages Payable 2. Compensation Expense 33300 Salaries and Wages Payable 3. Prepaid Insurance Insurance Expense 4. Sales Tax Expense Sales Taxes Payable (To record the sales taxes due.) Sales Taxes Payable Sales Tax Expense (To correct prior entry.)