The following errors were discovered in the preparation of the financial statements of Uni-Focus Company for the year ended November 30, 2021. Goods held on consignment from Tri-Facet Ltd. with a cost of $17,940 were incorrectly included in Uni-Focus Company’s inventory on November 30, 2020. The goods were not sold during the 2021 year and were returned to Tri-Facet. The goods were not included in Uni-Focus Company’s November 30, 2021 inventory count. Assume that Uni-Focus Company’s Inventory account accurately reflects the results of the November 30, 2021 count. During the first week of December 2017, office furniture was purchased for $18,505. The entire purchase was recorded with a debit to Office Supplies Expense, and a credit to Cash. Uni-Focus expected to keep the furniture for 10 years and sell it for $675 at the end of the asset’s useful life. Uni-Focus Company uses the straight-line method of depreciation for furniture. On December 1, 2019, Uni-Focus Company paid an insurance premium of $27,000 covering the years ended November 30, 2020, 2021, and 2022. The entire insurance premium was recorded as an expense in the 2020 year. Required: Prepare any journal entries necessary in 2021 to correct each of the above errors. Ignore any effects of income tax in preparing these journal entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

The following errors were discovered in the preparation of the financial statements of Uni-Focus Company for the year ended November 30, 2021.

Goods held on consignment from Tri-Facet Ltd. with a cost of $17,940 were incorrectly included in Uni-Focus Company’s inventory on November 30, 2020. The goods were not sold during the 2021 year and were returned to Tri-Facet. The goods were not included in Uni-Focus Company’s November 30, 2021 inventory count. Assume that Uni-Focus Company’s Inventory account accurately reflects the results of the November 30, 2021 count.
During the first week of December 2017, office furniture was purchased for $18,505. The entire purchase was recorded with a debit to Office Supplies Expense, and a credit to Cash. Uni-Focus expected to keep the furniture for 10 years and sell it for $675 at the end of the asset’s useful life. Uni-Focus Company uses the straight-line method of depreciation for furniture.
On December 1, 2019, Uni-Focus Company paid an insurance premium of $27,000 covering the years ended November 30, 2020, 2021, and 2022. The entire insurance premium was recorded as an expense in the 2020 year.

Required:

Prepare any journal entries necessary in 2021 to correct each of the above errors. Ignore any effects of income tax in preparing these journal entries.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions