Error and Correction The following scenarios are for GQH Company for years 2018 and 2019. Each scenario is independent. Assume that year 2018 is closed and year 2019 is open. 1. GQH received a 10,000 advance payment from a customer in 2017, the service was delivered in 2018. The transaction was recorded against Accounts Receivable in 2017. No other transaction was recorded in 2017 and 2018 related to the service. 2. GQH paid 24,000 for renting a warehouse on June 1, 2018 for the 1 year. This payment was recorded as rent expense, therefore no adjustment entry was made in 2018. 3. GQH purchased a delivery van on Oct 1, 2018 for 40,000 on credit with a useful life of 8 years and no salvage value. The purchase was recorded on Jan 1, 2019. No depreciation was recorded in 2018. GQH uses straight line method of depreciation. 4. Interest Expense for 2017 was 7,500 and for 2018 was 6,600. Interest expense was not accrued in 2017 and 2018 and was recorded when paid in the following year. Required For each scenario above, please provide the correction entry, if required.

Error and Correction The following scenarios are for GQH Company for years 2018 and 2019. Each scenario is independent. Assume that year 2018 is closed and year 2019 is open. 1. GQH received a 10,000 advance payment from a customer in 2017, the service was delivered in 2018. The transaction was recorded against Accounts Receivable in 2017. No other transaction was recorded in 2017 and 2018 related to the service. 2. GQH paid 24,000 for renting a warehouse on June 1, 2018 for the 1 year. This payment was recorded as rent expense, therefore no adjustment entry was made in 2018. 3. GQH purchased a delivery van on Oct 1, 2018 for 40,000 on credit with a useful life of 8 years and no salvage value. The purchase was recorded on Jan 1, 2019. No depreciation was recorded in 2018. GQH uses straight line method of depreciation. 4. Interest Expense for 2017 was 7,500 and for 2018 was 6,600. Interest expense was not accrued in 2017 and 2018 and was recorded when paid in the following year. Required For each scenario above, please provide the correction entry, if required.

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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