Question
On July 9, 2021, Carla Vista Enterprises Inc. discovered it had recorded the $71,000 purchase of land as legal expense on November 8, 2020. The
On July 9, 2021, Carla Vista Enterprises Inc. discovered it had recorded the $71,000 purchase of land as legal expense on November 8, 2020. The company had reported retained earnings of $545,000 at its previous year end, December 31, 2020. During 2021, Carla Vista had profit of $183,000 and it declared and paid cash dividends of $205,000. Carla Vista has a 25% income tax rate.
(a)
Prepare the journal entry to correct the error. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
Jan. 1 | select an account title to record correction of error on January 1 LandIncome Tax PayableIncome Tax ExpenseCashRetained Earnings | enter a debit amount | enter a credit amount |
select an account title to record correction of error on January 1 CashIncome Tax PayableIncome Tax ExpenseRetained EarningsLand | enter a debit amount | enter a credit amount | |
select an account title to record correction of error on January 1 Income Tax ExpenseIncome Tax PayableLandCashRetained Earnings | enter a debit amount | enter a credit amount | |
(To record correction of error.) |
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