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Conrad Playground Supply underwent a restructuring in 2 0 1 8 . The company conducted a thorough internal audit, during which the following facts were
Conrad Playground Supply underwent a restructuring in The company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred during before any adjusting entries or closing entries are prepared. a Additional computers were acquired at the beginning of and added to the company's office network. The $ cost of the computers was inadvertently recorded as maintenance expense. Computers have fiveyear useful lives and no material salvage value. This class of equipment is depreciated by the straightline method. b Two weeks prior to the audit, the company paid $ for assembly tools and recorded the expenditure as office supplies. The error was discovered a week later. c On December merchandise inventory was underslated by $ due to a mistake in the physical inventory count. The company uses the periodie inventory system. d Two years earlier, the company recorded a stock dividend common shares, $ par as follows: Retained earning Common stocl The shares had a market price at the time of $ per share. e At the end of the company failed to accrue $ of interest expense that accrued during the last four months of on bonds payable. The bonds, which were issued at face value, mature in The following entry was recorded on March when the semiannual interest was paid, as well as on September I of each year: f A threeyear liability insurance policy was purchased at the beginning of for $ The full premium was debited to insurance expense at the time. Required: For each error, prepare any journal entry necessary to correct the error, as well as any yearend adjusting entry for related to the situation described. Ignore income taxes.
Conrad Playground Supply underwent a restructuring in The company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred during before any adjusting entries or closing entries are prepared.
a Additional computers were acquired at the beginning of and added to the company's office network. The $ cost of the computers was inadvertently recorded as maintenance expense. Computers have fiveyear useful lives and no material salvage value. This class of equipment is depreciated by the straightline method.
b Two weeks prior to the audit, the company paid $ for assembly tools and recorded the expenditure as office supplies. The error was discovered a week later.
c On December merchandise inventory was underslated by $ due to a mistake in the physical inventory count. The company uses the periodie inventory system.
d Two years earlier, the company recorded a stock dividend common shares, $ par as follows:
Retained earning Common stocl
The shares had a market price at the time of $ per share.
e At the end of the company failed to accrue $ of interest expense that accrued during the last four months of on bonds payable. The bonds, which were issued at face value, mature in The following entry was recorded on March when the semiannual interest was paid, as well as on September I of each year:
f A threeyear liability insurance policy was purchased at the beginning of for $ The full premium was debited to insurance expense at the time.
Required:
For each error, prepare any journal entry necessary to correct the error, as well as any yearend adjusting entry for related to the situation described. Ignore income taxes.
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