Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

NEED ANSWERS TO RED BOXES + CALCULATIONS You have been engaged to review the financial statements of Gottschalk Corporation. In the course of your examination,

NEED ANSWERS TO RED BOXES + CALCULATIONS

image text in transcribed

image text in transcribed

You have been engaged to review the financial statements of Gottschalk 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 of $3,776 were not recorded because the bookkeeper thought that "they were immaterial. 2. Accrued vacation pay for the year of $30,063 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 $2,916 because "the amount of the check is about the same every year." 4. Reported sales revenue for the year is $1,839,948. 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 ex At the end of the current year, the balance in the Sales Tax Expense account $99,448. Prepare the necessary correcting entries, assuming that Gottschalk uses a calendar-year basis. (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

Auditing And Assurance Services

Authors: Timothy Louwers, Penelope Bagley, Allen Blay, Jerry Strawser, Jay Thibodeau

8th International Edition

1260570517, 978-1260570519

More Books

Students also viewed these Accounting questions

Question

How can you improve measurements in your research? Give examples.

Answered: 1 week ago