Required:For each of the above independent and unrelated errors, determinethe effect on the 2020 accounts. Prepare the journal entries eachcompany should record in 2021 to correct the errors.Assets LiabilitiesR/ERevenue ExpenseNIError 1Error 2Error 3Error #1 Correcting Entry:Error #2 Correcting Entry:Error #3 Correcting Entry: Example 4Error #1:On December 31, 2020, Dory Corporation failed to accrue officesupplies expense of $1,800. In January 2021, when Dory received thebill from the supplier, it was recorded as supplies expense.Error #2:On December 31, 2020, Marlin received a $90,000 prepayment froma tenant for 2021 rent. Marlin recorded the receipt as rent revenue.Error #3:At December 31, 2020, Nemo failed to accrue interest of $8,000 on anote receivable. At the beginning of 2021, when the companyreceived the cash, it was recorded as interest revenue.

The journal entries are prepared to keep the record of day to day transactions of the business.

Required: For each of the above independent and unrelated errors, determ the effect on the 2020 accounts. Prepare the journal entries ea company should record in 2021 to correct the errors. Assets Liabilities R/E Revenue Expense NI Error 1 Error 2 Error 3 Error #1 Correcting Entry: Error #2 Correcting Entry: Error #3 Correcting Entry:

Required: For each of the above independent and unrelated errors, determ the effect on the 2020 accounts. Prepare the journal entries ea company should record in 2021 to correct the errors. Assets Liabilities R/E Revenue Expense NI Error 1 Error 2 Error 3 Error #1 Correcting Entry: Error #2 Correcting Entry: Error #3 Correcting Entry:

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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Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $54,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Whispering's incremental borrowing rate is 8%. Whispering is unaware of the rate being used by the lessor. At the end of the lease, Whispering has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Whispering uses the straight-line method of depreciation on similar owned equipment. Click here to view factor tables.
1. What is the effect of the errors to the Retained Earnings at the beginning of 2019? 2. What is the effect of the errors to the Retained Earnings at the end of 2019?
Spring Garden Flowers had the following balances at December 31, 2024, before the year-end adjustments: E (Click the icon to view the balances.) The aging of accounts receivable yields the following data: E (Click the icon to view the accounts receivable aging schedule.) Requirements Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method. 1. 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Requirement 1. Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts Debit Credit Dec. 31 Data Table Accounts Receivable Allowance for Bad Debts 66,000 1,615 Requirement 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Allowance for Bad Debts Print Done Data Table Age of Accounts Receivable 0-60 Days Over 60 Days Total…
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Part A Albert Trading Limited used the statement of financial position approach to estimate the impairment loss of receivable. An aging of account receivable at 31 December 2019 revealed that S68,000 of the $835,000 outstanding accounts receivable will prove uncollectible. The Allowance for Impairment has a debit balance of $6,200 prior to adjustment. Required: (Explanation of the Journal Entry is not required) Prepare an adjusting entry on 31 December 2019 to recognize the impairment loss of receivable. Part B On 12 January 2020, Peter Lee, a major customer, declared bankruptey, and Albert Trading, determined that a receivable from Peter Lee in the amount of $3,400 was worthless. Required: (Explanation of the Journal Entry is not required) Prepare the journal entry required by Albert Trading in this situation.
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