Reference no: EM132448610

Problem - Review the financial statements of Culver Corporation

In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows.

1. Year-end wages payable of $3,550 were not recorded because the bookkeeper thought that "they were immaterial."

2. Accrued vacation pay for the year of $29,700 was not recorded because the bookkeeper "never heard that you had to do it."

3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,544 because "the amount of the check is about the same every year."

4. Reported sales revenue for the year is $2,125,300. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state's Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that "the sales tax is a selling expense." At the end of the current year, the balance in the Sales Tax Expense account is $103,800.

The necessary correcting entries, assuming that Culver uses a calendar-year basis?