The following are independent errors made by a company that uses a periodic inventory system:Failure to record a purchase of $10,000 inventory on credit; however, inventory was properly counted at the end of the period. Assume the error was discovered prior to any payment for the purchase.Expensed the purchase of a machine of $50,000. The machine has a 10 year useful life with no salvage value.Failure to accrue wages of $8,000. Wages had not been paid at the time the error was discovered.Failure to record an allowance for uncollectibles of $25,000. The error was discovered prior to the accrual for bad debt in the following year.Included collections in advance of $100,000 as revenue.Included payments of $12,000 advance as expenses.Failure to accrue warranty costs of $14,000.Failure to record depreciation expense of $6,000 on assets purchased during the year.Required:Prepare the correcting journal entries if the company discovers each error in the year after it is made. Ignore income taxes. If an amount box does not require an entry, leave it blank.

1. **Failure to record a purchase of $10,000 inventory on credit:** **Entry:** ``` Dr. Inventory…

Answered: The following are independent errors…

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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The following are independent errors made by a company that uses a periodic inventory system:

Failure to record a purchase of $10,000 inventory on credit; however, inventory was properly counted at the end of the period. Assume the error was discovered prior to any payment for the purchase.
Expensed the purchase of a machine of $50,000. The machine has a 10 year useful life with no salvage value.
Failure to accrue wages of $8,000. Wages had not been paid at the time the error was discovered.
Failure to record an allowance for uncollectibles of $25,000. The error was discovered prior to the accrual for bad debt in the following year.
Included collections in advance of $100,000 as revenue.
Included payments of $12,000 advance as expenses.
Failure to accrue warranty costs of $14,000.
Failure to record depreciation expense of $6,000 on assets purchased during the year.

Required:

Prepare the correcting journal entries if the company discovers each error in the year after it is made. Ignore income taxes. If an amount box does not require an entry, leave it blank.

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