Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Record entry necessary for error correction. Record adjusting journal entry for 2021. Record entry necessary for error correction. Record adjusting journal entry for 2021. Record

image text in transcribed

  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
  • Record entry necessary for error correction.
  • Record adjusting journal entry for 2021.
Problem 20-15 (Algo) Correction of errors; six errors (LO20-6) Conrad Playground Supply underwent a restructuring in 2021. The company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred during 2021 before any adjusting entries or closing entries are prepared. a. Additional computers were acquired at the beginning of 2019 and added to the company's office network. The $44.000 cost of the computers was inadvertently recorded as maintenance expense. Computers have five-year useful lives and no material salvage value. This class of equipment is depreciated by the straight-line method. b. Two weeks prior to the audit, the company paid $16,000 for assembly tools and recorded the expenditure as office supplies. The error was discovered a week later. c. On December 31, 2020, merchandise inventory was understated by $76,000 due to a mistake in the physical inventory count. The company uses the periodic inventory system. d. Two years earlier, the company recorded a 4% stock dividend (1,800 common shares. $1 par) as follows: Retained earnings Common stock 1,800 1,800 The shares had a market price at the time of $12 per share. e. At the end of 2020, the company failed to accrue $100,000 of interest expense that accrued during the last four months of 2020 on bonds payable. The bonds, which were issued at face value, mature in 2025. The following entry was recorded on March 1, 2021, when the semiannual interest was paid, as well as on September 1 of each year: Interest expense Cash 150,000 150,000 f. A three-year liability insurance policy was purchased at the beginning of 2020 for $71,400. The full premium was debited to insurance expense at the time. Required: For each error, prepare any journal entry necessary to correct the error, as well as any year-end adjusting entry for 2021 related to the situation described. (Ignore income taxes.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

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

Software Engineering Reviews And Audits

Authors: Boyd L. Summers

1st Edition

143985145X, 978-1439851456

More Books

Students also viewed these Accounting questions

Question

Draft a proposal for a risk assessment exercise.

Answered: 1 week ago