Below are three independent and unrelated errors. 1. On December 31, 2023, Wolfe-Bache Corporation failed to accrue salaries expense of $1,750. In January 2024, when it paid employees for the December 27-January 2 workweek, Wolfe-Bache made the following entry. General Journal Salaries expense Cash Debit 1,750 Credit 1,750 2. On the last day of 2023, Midwest Importers received a $89,000 prepayment from a tenant for 2024 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2024. 3. At the end of 2023, Dinkins-Lowery Corporation failed to accrue interest of $7,900 on a note receivable. At the beginning of 2024, when the company received the cash, it was recorded as interest revenue. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements? 2. Prepare any journal entries each company should record in 2024 to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements? Error a Income Statement: Balance Sheet: Error b Income Statement Balance Sheet: Error c Income Statement: Balance Sheet: < Required 1 Required 2 >
Below are three independent and unrelated errors. 1. On December 31, 2023, Wolfe-Bache Corporation failed to accrue salaries expense of $1,750. In January 2024, when it paid employees for the December 27-January 2 workweek, Wolfe-Bache made the following entry. General Journal Salaries expense Cash Debit 1,750 Credit 1,750 2. On the last day of 2023, Midwest Importers received a $89,000 prepayment from a tenant for 2024 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2024. 3. At the end of 2023, Dinkins-Lowery Corporation failed to accrue interest of $7,900 on a note receivable. At the beginning of 2024, when the company received the cash, it was recorded as interest revenue. Required: For each error: 1. What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements? 2. Prepare any journal entries each company should record in 2024 to correct the errors. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements? Error a Income Statement: Balance Sheet: Error b Income Statement Balance Sheet: Error c Income Statement: Balance Sheet: < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Below are three independent and unrelated errors.
1. On December 31, 2023, Wolfe-Bache Corporation failed to accrue salaries expense of $1,750. In January 2024, when it paid
employees for the December 27-January 2 workweek, Wolfe-Bache made the following entry.
General Journal
Salaries expense
Cash
Debit
1,750
Credit
1,750
2. On the last day of 2023, Midwest Importers received a $89,000 prepayment from a tenant for 2024 rent of a building. Midwest
recorded the receipt as rent revenue. The error was discovered midway through 2024.
3. At the end of 2023, Dinkins-Lowery Corporation failed to accrue interest of $7,900 on a note receivable. At the beginning of
2024, when the company received the cash, it was recorded as interest revenue.
Required:
For each error:
1. What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements?
2. Prepare any journal entries each company should record in 2024 to correct the errors.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
What would be the effect of each error on the income statement and the balance sheet in the 2023 financial statements?
Error a
Income Statement:
Balance Sheet:
Error b
Income Statement
Balance Sheet:
Error c
Income Statement:
Balance Sheet:
< Required 1
Required 2 >
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