Bob Thebeau reviewed the records and found the following errors: 1. Cash received from a customer on account was recorded as $650 instead of $590. 2. The purchase on account of a computer that cost $3,300 was recorded as a debit to supplies and a credit to accounts payable for $3,300. 3. The computer in error 2 was purchased February 1, 2003, and is expected to have a three-year useful life. Amortization, estimated to be $275, has not been recorded. 4. A payment of $30 for advertising expense was entered as a debit to Miscellaneous Expense of $30 and a credit to Cash of $30. 5. The first salary payment this month was for $1,900, which included $800 of salaries payable on March 31. The payment was recorded as a debit to Salaries Expense of $1,900 and a credit to Cash of $1,900. (No reversing entries were made on April 1.) 6. A cash payment for a repair expense on equipment of $86 was recorded as a debit to Equip- ment $68 and a credit to Cash of $68. 7. Rent expense of $1,000 is owed, but has not yet been recorded. Instructions (a) Prepare an analysis of each error that shows (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. (b) Prepare a correct trial balance.

Bob Thebeau reviewed the records and found the following errors: 1. Cash received from a customer on account was recorded as $650 instead of $590. 2. The purchase on account of a computer that cost $3,300 was recorded as a debit to supplies and a credit to accounts payable for $3,300. 3. The computer in error 2 was purchased February 1, 2003, and is expected to have a three-year useful life. Amortization, estimated to be $275, has not been recorded. 4. A payment of $30 for advertising expense was entered as a debit to Miscellaneous Expense of $30 and a credit to Cash of $30. 5. The first salary payment this month was for $1,900, which included $800 of salaries payable on March 31. The payment was recorded as a debit to Salaries Expense of $1,900 and a credit to Cash of $1,900. (No reversing entries were made on April 1.) 6. A cash payment for a repair expense on equipment of $86 was recorded as a debit to Equip- ment $68 and a credit to Cash of $68. 7. Rent expense of $1,000 is owed, but has not yet been recorded. Instructions (a) Prepare an analysis of each error that shows (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. (b) Prepare a correct trial balance.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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