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The first audit of the books of Cheyenne Company was made for the year ended December 3 1 , 2 0 2 6 . In
The first audit of the books of Cheyenne Company was made for the year ended December In examining the books, the auditor found that certain items had been overlooked or incorrectly handled in the last years. These items are:
At the beginning of the company purchased a machine for $salvage value of $ that had a useful life of years. The bookkeeper used straightline depreciation but failed to deduct the salvage value in computing the depreciation base for the years.
At the end of the company failed to accrue sales salaries of $
A tax lawsuit that involved the year was settled late in It was determined that the company owed an additional $ in taxes related to The company did not record a liability in or because the possibility of loss was considered remote, and charged the $ to a loss account in
Cheyenne Company purchased a copyright from another company early in for $ Cheyenne had not amortized the copyright because its value had not diminished. The copyright has a useful life at purchase of years.
In the company wrote off $ of inventory considered to be obsolete; this loss was charged directly to Retained Earnings.
Prepare the journal entries necessary in to correct the books, assuming that the books have not been closed. Disregard effects of corrections on income tax. 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 O for the amounts. Round answers to decimal places, eg List all debit entries before credit entries.
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