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Problem 4: Analysis and Correction of Accounting Errors transactions at issue are presented below. Bothell Corporation began operations on December 31, 2023. The controller is concerned about certain business transactions that the company leter ted in 2025 the A. The company has mistakenly recognized bad debt expense when the receivables have actualy become uncollectible in the following amounts 2024 2025 31,800 65,000 $83,000 for 2025. The controller estimates that bad debt expense based on a GAAP accepted method (the percentage of-accounts receivable) should be $$4 000 for 2024. and B. Inventory has been shipped on consignment. These transactions have been mistakenly recorded as ordinary sales and biled as such our account Inventory other and in the hands of consignees amounted to $280,000 at December 31, 2024, and $425,000 at December 31, 2025. The cost of goods sold is 60% of the while it in each year. Assume that all the consigned inventory is sold in the following year. The company uses the perpetual inventory system. C. Ending inventory was overstated by $8,000 on December 31, 2024, and overstated by $5,000 on December 31, 2025. D. On January 1, 2024, a truck was purchased for $28,000. The truck had an estimated life of eight years, but it was immediately expensed by wrote The welland cost should have been capitalized, and straight-line depreciation should have been used with $2,000 estimated salvage value. E. The company has failed to accrue sales commissions payable at the end of each of the last 2 years, as follows. Sales commission expertous are so are paid in the next year. 31-Dec-24 $5,500 31-Dec-25 $3,500 Assuming that the accounting books of 2025 have not been closed, prepare the journal entries on December 31, 2025 (Ignoring the income tax effect) (to errors.nvas X D Question 17 Problem 4: Analysis and Correction of Accounting Errors Bothell Corporation began operations on December 31, 2023. The controller is concerned about certain business transactions that be ampany cticthat it IS my transactions at issue are presented below. A. The company has mistakenly recognized bad debt expense when the receivables have actualy become uncollectible in the following ancute 2024 2025 31,800 65,000 The controller estimates that bad debt expense based on a GAAP accepted method (the percentage of-accounts receivable) should be fisk,20tator 204 ) $83,000 for 2025. B. Inventory has been shipped on consignment. These transactions have been mistakenly recorded as ordinary sale, and biled as such an acount. in and in the hands of consignees amounted to $280,000 at December 31, 2024, and $425,000 at December 31, 2025 the cast of put it a JeS of the wing pur in each year. Assume that all the consigned inventory is sold in the following year. The company uses the perpetual inventory primm C. Ending inventory was overstated by $8,000 on December 31, 2024, and overstated by $5,000 on December 31 2025 D. On January 1, 2024, a truck was purchased for $28,000. The truck had an estimated life of eight years but it was immediately cost should have been capitalized, and straight-line depreciation should have been used with $2000 estimated salvage sate E. The company has failed to accrue sales commissions payable at the end of each of the last 2 years, as folows Sales cam are paid in the next year, 31-Dec-24 $5,500 31-Dec.25 $3,500 Assuming that the accounting books of 2025 have not been closed, prepare the journal entries on December 14 203 lowniya errors. Click to open: Tableces amounted to cost of goods sold is 80% of Wentory is sold in the following year. The Cember 31, 2025. y was overstated by $8,000 on December 31, 2024, and overstated by $5,000 on D. On January 1, 2024, a truck was purchased for $28,000. The truck had an estimated life of eight years, but it was immediately expensed by error. The acquisition cost should have been capitalized, and straight. line depreciation should have been used with $2,000 estimated salvage value. E. The company has failed to accrue sales commissions payable at the end of each of the last 2 years, as follows. Sales commission expenses are recorded when they are paid in the next year. 31-Dec-24 $5,500 31-Dec-25 $3,500 Assuming that the accounting books of 2025 have not been closed, prepare the journal entries on December 31, 2025 (ignoring the income tax effect) to correct the errors. Click to open