Purchase Solution

Error Correction

Not what you're looking for?

Ask Custom Question

Correcting Entries. A partial trial balance 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:

1 . A physical count of supplies on hand on December 31, 2008, totaled $1,100.

2 . 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.

3 . The Interest Receivable on Investments account was also left unchanged during 2008. Accrued interest on investments amounts to $4,350 on December 31, 2008.

4 . The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008.

5 . $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.

6 . Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000

7 . 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

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

(b) Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)

Attachments
Purchase this Solution

Solution Summary

The solution explains the journal entries to be made to correct the errors.

Purchase this Solution


Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.