Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

II. Pretend you are an auditor (I know, I know, this is an amazing dream). Imagine that you are performing the 12/31/20 financial statement audit

image text in transcribedimage text in transcribed

II. Pretend you are an auditor (I know, I know, this is an amazing dream). Imagine that you are performing the 12/31/20 financial statement audit of Curly's Coffee and Vinyl Shop. During the substantive procedures, you discovered the situations listed below. If it is a misstatement, then you will need to communicate these to the client and request that they be fixed. In that case, write the correcting journal entry that the client should book to correct (all years with errors). Include date, accounts debited and credited, and amounts. If no correcting entry is needed, then write: no correcting entry necessary and provide a brief explanation. 2) During your search for unrecorded liabilities, you found that a $1,000 invoice related to December 2020 utility expenses was entered into the accounting system with an effective date of 1/3/21. Curlys paid their vendor for the invoice on 1/20/2021 with check #189. 3) You tested their repairs and maintenance expense account and found an error. They purchased a fancy new espresso machine on 01/01/2020 (check #74 for $5,000). They mistakenly expensed it (as repairs and maintenance expense) instead of capitalizing as equipment. Write the journal entries needed to correct error and properly reflect all 2020 accounting entries that should have been booked related this capitalized asset, which has an expected 5-year useful life and no estimated salvage value

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

Microeconomics

Authors: Michael Parkin

6th Edition

0321112075, 9780321112071

More Books

Students also viewed these Accounting questions

Question

Has each action got a clear and measurable outcome?

Answered: 1 week ago

Question

Have you eliminated jargon and unexplained acronyms?

Answered: 1 week ago