Reference no: EM132645059

Sanchez Company discovered the following errors made in January 2020.

1. A payment of Salaries and Wages Expense of $600 was debited to Supplies and credited to Cash, both for $600.

2. A collection of $3,000 from a client on account was debited to Cash $200 and credited to Service Revenue $200.

3. The purchase of supplies on account for $860 was debited to Supplies $680 and credited to Accounts Payable $680.

ACTION PLAN

1. Salaries and Wages Expense 600      Supplies            600

2. Service Revenue                 200     Cash              2,800

Accounts Receivable            3,000

3. Supplies ($860 - $680)    180

Accounts Payable                180

Problem 1: Based on the information about Yale Express, what was the bottom line impact on net income when the correcting entries were made?

Group of answer choices

Option 1: decrease of .74 Million

Option 2: increase of .74 million

Option 3: decrease of 3.02 million

Option 4: increase of 3.02 million

Problem 2: Based on the information about Yale Express, what adjusting entry was overlooked immediately following the merger?

Group of answer choices

Option 1: unearned revenue

Option 1: prepaid expense

Option 1: accrued revenue

Option 1: accrued expense