9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by t…

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable ari…

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Textbook Question

Chapter 20, Problem 20.12BE

Error correction

• LO20–6

In 2018, the internal auditors of Development Technologies, Inc., discovered that (a) 2017 accrued wages of $2 million were not recognized until they were paid in 2018, and (b) a $3 million purchase of merchandise in 2018 was recorded in 2017 instead. The physical inventory count at the end of 2017 was correct. Ignoring income taxes, what journal entries are needed in 2018 to correct each error? Also, briefly describe any other measures Development Technologies would take in connection with correcting the errors.

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Chapter 20, Problem 20.11BE

Chapter 20, Problem 20.1E

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Chapter 20 Solutions

Intermediate Accounting

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Solution Summary: The author explains the rectification of accounting errors in a systematic manner. The financial statements are to be retrospectively restated to reflect the correct wages expenses, net income and retained earnings.

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