Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Before preparing financial statements for the current year, the chief accountant for Cullumber Company discovered the following errors in the accounts. 1. 2. 3.

image text in transcribed

Before preparing financial statements for the current year, the chief accountant for Cullumber Company discovered the following errors in the accounts. 1. 2. 3. The declaration and payment of $46,000 cash dividend was recorded as a debit to Interest Expense $46,000 and a credit to Cash $46,000. A 10% stock dividend (1,300 shares) was declared on the $12 par value stock when the market price per share was $18. The only entry made was Stock Dividends (Dr.) $15,600 and Dividend Payable (Cr.) $15,600. The shares have not been issued. A 4-for-1 stock split involving the issue of 352,000 shares of $5 par value common stock for 88,000 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,760,000 and a credit to Common Stock $1,760,000. Prepare the correcting entries at December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Carl S Warren

5th Edition

9780538489737, 538749091, 538489731, 978-0538749091

More Books

Students also viewed these Accounting questions