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    Julie Hartsack error analysis and correcting entries

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    (Error Analysis; Correcting Entries) A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008.

    Dr. Cr.
    Supplies on hand
    $ 2,700

    Accrued salaries and wages
    $ 1,500
    Interest receivable on investments
    5,100

    Prepaid insurance
    90,000

    Unearned rent
    -0-

    Accrued interest payable
    15,000
    Additional adjusting data:
    A physical count of supplies on hand on December 31, 2008, totaled $1,100.
    Through oversight, the Accrued Salaries and Wages account was not changed during 2008.
    Accrued salaries and wages on December 31, 2008, amounted to $4,400.
    The Interest Receivable on Investments account was also left unchanged during 2008.
    Accrued interest on investments amounts to $4,350 on December 31, 2008.
    The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008.
    $28,000 was received on January 1, 2008 for the rent of a building for both 2008 and 2009. The entire amount was credited to rental income.
    Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000.
    A further review of depreciation calculations of prior years revealed that depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment.

    Instructions

    Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)
    Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)

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    The solution examines Julie Hartsack error analysis and correcting entries.

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