Section Bi Error Analysis Prepare the journal entry to correct the following tha

Question

Section Bi Error Analysis Prepare the journal entry to correct the following that the Albany State Company (ASC) discovered at December 31, 2017. Assume that the books are still open. 1. ASC did not record depreciation of Ss0,000 for the year 2015 on factory equipment. ASC received $40,000 on January 1, 2017 for the rent of a building for both 2017 and 2018. 2. The entire amount was credited to rental income on January 1, 2017. 3. ASC did not record accrued wages in the amount of $15,000 on December 31, 2016 On January 1, 2017, ASC paid $12,000 for a three-year insurance policy. The entire amount was debited to insurance expense on January 1, 2017. 4. 5. ASC discovered that the ending inventory in 2015 was overstated by $25,000.

Explanation / Answer

Number Account Titles and Explanation Debit Credit 1 Retained earnings 50000 Accumulated depreciation-factory equipment 50000 (To record prior period adjustment) 2 Rental income 20000 Unearned rental income ($40000 / 2 years) 20000 (To record unearned rental income) 3 Retained earnings 15000 Salaries and wages payable 15000 (To record prior period adjustment) 4 Prepaid insurance ($12000 x 2 / 3 years) 8000 Insurance expense 8000 (To record prepaid insurance) 5 Retained earnings 25000 Inventory 25000 (To record prior period adjustment)

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.