Question 1. (10 Marks) Error Analysis. You have been assigned to examine the financial statements of the GDK and Mohammed Al Ali Company for the year ended December 31, 2020. You discover the following situations: 1. The accumulated depreciation account of office equipment had a balance of 90,000. Depreciation of 3,000 was not recorded 2. The physical inventory count on December 31 2019 improperly excluded 6,000 of purchases of merchandise that was stored at a public warehouse. 3. A collection advance from a customer of 80,000 was debited to cash and credited to accounts receivable. Services provided for the advance amounted to 20,000. The remaining balance of services had not yet been provided. 4. The Company provided services to a customer amounting to 200,000 on account for which the customer made a down payment of 40,000. The books showed a debit to unearned revenue 40,000, a credit to accounts receivable of 160,000 and a debit to cash 200,000 5. The merchandise inventory had a balance of 120,000 at year end. The physical inventory count at year end showed a merchandise inventory balance of 80,000. Cost of goods sold of 40,000 was not recorded on the sale of merchandise 6. The rent for an apartment of 24,000 was paid October 1 for 12 month period. The prepaid rent balance at year end was 18,000 7. Expenses for Utilities of 2,000 were paid in the current year and recorded. However telephone expenses of 4,000 were not recorded since the company did not have an invoice from the supplier 8. The company pays the secretary 500 for a five day week. Accrued wages for two days work were not recorded at year end G e BACC 205 Assessment Error Analysis WITH NO ANSWERS SUMMER 1 2020 GDK CAA Compatibility Mode] - Word ut References Madings Review View Help Tell me what you want to do Required: Review the above transactions and prepare corrections, if any. 1. The accumulated depreciation account of office equipment had a balance of 90,000. Depreciation of 3,000 was not recorded 2. The physical inventory count on December 31 2019 improperly excluded 6,000 of purchases of merchandise that was stored at a public warehouse 3. A collection advance from a customer of 80,000 was debited to cash and credited to accounts receivable. Services provided for the advance amounted to 20,000. The remaining balance of services had not yet been provided 4. The Company provided services to a customer amounting to 200,000 on account for which the customer made a down payment of 40,000. The books showed a debit to unearned revenue 40,000, a credit to accounts receivable of 160,000 and a debit to cash 200,000 SUMMER 1 2020 GEORGED KAMBOURIS @ . out References Mailings Review View Tell me what you want to do Help 5. The merchandise inventory had a balance of 120,000 at year end. The physical inventory count at year end showed a merchandise inventory balance of 80,000. Cost of goods sold of 40,000 was not recorded on the sale of merchandise. 6. The rent for an apartment of 24,000 was paid October 1 for 12 month period. The prepaid rent balance at year end was 18,000 7. Expenses for Utilities of 2,000 were paid in the current year and recorded. However telephone expenses of 4,000 were not recorded since the company did not have an invoice from the supplier. 8. The company pays the secretary 500 for a five day week. Accrued wages for two days work were not recorded at year end