For this example, Zion Corporation discovers the following errors in January 2017 relating to 2016 accounting transactions. The books for the 12 months ending December 31, 2016, are still open. All years prior to January 1, 2016, are closed: 1- A math mistake was made, and depreciation expense is understated by $35,000 for 2016. 2- Zion failed to recognize and accrue salaries payable of $3,000 on 12/31/16.
For this example, Zion Corporation discovers the following errors in January 2017 relating to 2016 accounting transactions. The books for the 12 months ending December 31, 2016, are still open. All years prior to January 1, 2016, are closed: 1- A math mistake was made, and depreciation expense is understated by $35,000 for 2016. 2- Zion failed to recognize and accrue salaries payable of $3,000 on 12/31/16.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| For this example, Zion Corporation discovers the following errors in January 2017 relating to 2016 accounting transactions. The books for the 12 months ending December 31, 2016, are still open. All years prior to January 1, 2016, are closed: | |||||||||||||
| 1- A math mistake was made, and depreciation expense is understated by $35,000 for 2016. | |||||||||||||
| 2- Zion failed to recognize and accrue salaries payable of $3,000 on 12/31/16. | |||||||||||||
| 3- Zion shipped an order to a customer on 12/26/16 for $4,500, but did not record it on the books yet. The sale was on account and the cost of this order to Zion was $2,875. | |||||||||||||
| 4- Zion further notices that depreciation expense for years prior to January 1, 2016, is understated by an additional $50,000 | |||||||||||||
| 5- Cash Payment for Furniture $77 debited to Cash account and credited to Furniture account on 12/14/16. | |||||||||||||
| 6- A check for a utility bill (paid with cash) for $146 was incorrectly recorded in the journal as $164 on 12/3/16. | |||||||||||||
| 7 -A shipment of inventory was received on 12/23/16. The box was pushed to the side and not opened until 1/2/17. The cost of this inventory was $3,500 and freight in (FOB shipping point) paid by Zion was $450. | |||||||||||||
| 8- Zion purchased a machine of 12/31/16 for $400,000. The accountant incorrectly coded the payment for the machine to repair expense. Make the correcting entry. | |||||||||||||
| 9- A fully |
| Make the correcting entries for the above errors (give explanations): |
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