Prepare journal entries to correct the errors

Assignment Help Accounting Basics
Reference no: EM132892214

Problem - At the end of 2020, while auditing Sandlin Company's books, before the books have been closed, you find the following items:

a. A building with a 30 -year life (no residual value, depreciated using the straight-line method) was purchased on January 1, 2020, by issuing a $90,000 non-interest-bearing, 4 -year note. The entry made to record the purchase was a debit to Building and a credit to Notes Payable for $90,000; 12% is a fair rate of interest on the note.

b. The inventory at the end of 2020 was found to be overstated by $15,000. At the same time, it was discovered that the inventory at the end of 2019 had been overstated by $35,000. The company uses the perpetual inventory system.

c. For the last 3 years, the company has failed to accrue salaries and wages. The correct amounts at the end of each year were: 2018, $12,000; 2019, $18,000; and 2020, $10,000.

Required -

1. Prepare journal entries to correct the errors. Ignore income taxes.

2. Assume, instead, that the company discovered the errors after it had closed the books. Prepare journal entries to correct the errors. Ignore income taxes.

Reference no: EM132892214

Questions Cloud

Predict a dichotomous variable outcome : Construct a model or example to predict a dichotomous variable outcome.
Exercise leadership in foreign channels : Why is it typically more difficult to exercise leadership in foreign channels than in domestics ones?
Prepare the statement of changes in equity of riley ltd : Prepare the statement of changes in equity of Riley Ltd for the year ended 30 June 2019 in accordance with AASB 101/IAS 1.
Adoption of biometrics for use in information security : Find a book about the adoption of biometrics for use in information security. Did review affect your attitude about credibility of author or content of book?
Prepare journal entries to correct the errors : Assume, instead, that the company discovered the errors after it had closed the books. Prepare journal entries to correct the errors. Ignore income taxes
Essential planning and administrative roles of sales manager : (1) What are the essential planning and administrative roles of the sales manager?
What changed in the industry : What changed in the industry and what other industries became involved?
What is communication theory : 1). What is Communication theory? 2). How does communication theory impact on Instructional Design?
Applied in the presentation of financial statements : Discuss the eight overall considerations to be applied in the presentation of financial state- ments. Of these, which are more subjective? Explain your answer

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd