On 28 July 2020, Dopey, the chief accountant discovers a note he wrote on 15 June 2020 that he needs to record some items into the journal before the last day of the financial year. Unfortunately, Dopey fell ill later that day and did not tell the junior accountant to process the items. The list includes: Major overhaul of plastics fabricating machine $30,000 (bank loan). Training cost of operator for updated plastics fabricating machine $2,500. Purchase of new letterhead stationery $200 and printing costs of business cards for new sales representative $120. (Invoice received for both.) Dopey recovered from his illness and returned to work on 15 July 2020, discovered his note and attended to the overlooked items. Required: 6) Discuss the accounting principle that Dopey should adopt to decide how to record the missing items. Use examples to illustrate your answer. (ii) The junior accountant has drafted the correcting journal as follows: Dr. Depreciation $3,000 (because the overhaul is expected to last 10 years with no residual value) Dr. Plastic fabricating machine $30,000 (purchased on account) Dr. Stationery expense $320 (combining the 2 stationery costs and paid in cash) Dr. Wages expense $2,500 Cr. Accumulated depreciation of plastics fabricating machine $3,000 Cr. Accounts payable $30,000 Cr. Wages payable $2,500 Cr. Cash $320 Correct the suggested journal entry as prepared by the junior accountant and explain briefly why you have made your changes. On 28 July 2020, Dopey, the chief accountant discovers a note he wrote on 15 June 2020 that he needs to record some items into the journal before the last day of the financial year. Unfortunately, Dopey fell ill later that day and did not tell the junior accountant to process the items. The list includes: Major overhaul of plastics fabricating machine $30,000 (bank loan). Training cost of operator for updated plastics fabricating machine $2,500. Purchase of new letterhead stationery $200 and printing costs of business cards for new sales representative $120. (Invoice received for both.) Dopey recovered from his illness and returned to work on 15 July 2020, discovered his note and attended to the overlooked items. Required: 6) Discuss the accounting principle that Dopey should adopt to decide how to record the missing items. Use examples to illustrate your answer. (ii) The junior accountant has drafted the correcting journal as follows: Dr. Depreciation $3,000 (because the overhaul is expected to last 10 years with no residual value) Dr. Plastic fabricating machine $30,000 (purchased on account) Dr. Stationery expense $320 (combining the 2 stationery costs and paid in cash) Dr. Wages expense $2,500 Cr. Accumulated depreciation of plastics fabricating machine $3,000 Cr. Accounts payable $30,000 Cr. Wages payable $2,500 Cr. Cash $320 Correct the suggested journal entry as prepared by the junior accountant and explain briefly why you have made your changes
