Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone please verify if my answers are correct, and if not explain why? Thank you Below are three independent and unrelated errors. a. On

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Can someone please verify if my answers are correct, and if not explain why? Thank you

Below are three independent and unrelated errors. a. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $2,250. In January 2021, when it paid employees for the December 27-January 2 workweek, Wolfe-Bache made the following entry: Salaries expense Cash 2,250 2,250 b. On the last day of 2020, Midwest Importers received a $99,000 prepayment from a tenant for 2021 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2021. c. At the end of 2020, Dinkins-Lowery Corporation failed to accrue interest of $8,900 on a note receivable. At the beginning of 2021, when the company received the cash, it was recorded as interest revenue. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? 2. Prepare any journal entries each company should record in 2021 to correct the errors. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? 2. Prepare any journal entries each company should record in 2021 to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements? Error a Income Sta Balance Sheet: Expenses understated Liabilities understated Net income overstated Retained earnings overstated Error b Income Statement: Balance Sheet: Revenue overstated Liabilities understated Net income overstated Retained earnings overstated Error Income Statement: Balance Sheet: Revenue understated Assets understated Net income understated Retained earnings understated Required 1 Required 2 > Record correction of salaries expense error. Note: Enter debits before credits. General Journal Credit Transaction a Debit 2,250 Retained earnings Salaries expense 2.250 Record correction of rent received in advance. Note: Enter debits before credits. Credit Transaction b General Journal Retained earnings Rent revenue Debit 99,000 99,000 A B Record correction of interest revenue on note receivable. Note: Enter debits before credits. Transaction Credit General Journal Interest revenue Retained earnings Debit 8.900 8,900

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_2

Step: 3

blur-text-image_3

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

Principles Of Managerial Accounting

Authors: Christine Jonick, Dahlonega, GA

1st Edition

1940771455, 9781940771458

More Books

Students also viewed these Accounting questions