Dao Vang, CPA, was retained by Universal Cable to prepare financial statements f
ID: 2415049 • Letter: D
Question
Dao Vang, CPA, was retained by Universal Cable to prepare financial statements for April 2015. Vang accumulated all the ledger balances per Universal’s records and found the following. UNIVERSAL CABLE Trial Balance April 30, 2015 Debit Credit Cash $3,924 Accounts Receivable 3,301 Supplies 863 Equipment 10,570 Accumulated Depreciation-Equip. $1,322 Accounts Payable 2,234 Salaries and Wages Payable 787 Unearned Service Revenue 978 Common Stock 9,304 Retained Earnings 2,853 Service Revenue 5,833 Salaries and Wages Expense 3,394 Advertising Expense 426 Miscellaneous Expense 327 Depreciation Expense 506 $23,311 $23,311 Dao Vang reviewed the records and found the following errors. 1. Cash received from a customer on account was recorded as $730 instead of $370. 2. A payment of $74 for advertising expense was entered as a debit to Miscellaneous Expense $74 and a credit to Cash $74. 3. The first salary payment this month was for $1,876, which included $787 of salaries payable on March 31. The payment was recorded as a debit to Salaries and Wages Expense $1,876 and a credit to Cash $1,876. (No reversing entries were made on April 1.) 4. The purchase on account of a printer costing $337 was recorded as a debit to Supplies and a credit to Accounts Payable for $337. 5. A cash payment of repair expense on equipment for $82 was recorded as a debit to Equipment $28 and a credit to Cash $28. Collapse question part (a) Prepare an analysis of each error showing the incorrect entry, the correct entry, and the correcting entry. Items 4 and 5 occurred on April 30, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) INCORRECT ENTRY No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. CORRECT ENTRY No. Account Titles and Explanation Debit Credit 1 2. 3. 4. 5. CORRECTING ENTRY No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5.
Explanation / Answer
Incorrect entry Correct entry Rectifying entry Cash A/C Dr 730 Cash A/C Dr 370 Debtor A/C Dr 360 To Debtor A/C 730 To Debtor A/C 370 To cash A/C 360 Miscelleneous expense A/C Dr 74 Advertising expense A/C Dr 74 Advertising A/C Dr 74 To Cash A/C 74 To Cash A/C 74 To Miscellaneous A/C 74 Salaries A/C Dr 1876 Salaries A/C Dr 1089 Cash A/C Dr 787 To Cash A/C 1876 To Cash A/C 1089 To outstanding salaries A/C 787 Salaries A/C Dr 787 To Outstanding salaries A/C 787 Supplies A/C Dr 337 Printer A/C Dr 337 Printer A/C Dr 337 To Accounts payable A/C 337 To Accounts payable A/C 337 To Supplies A/C 337 Equipment A/C Dr 28 Repairs A/C Dr 82 Repairs A/C Dr 82 To Cash A/C 28 To Cash A/C 82 To Equipment A/C 28 To Cash A/C 54
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