Below are three independent and unrelated errors. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $1,400. In January 2021, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following entry:
Below are three independent and unrelated errors. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $1,400. In January 2021, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following entry:
College Accounting (Book Only): A Career Approach
12th Edition
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cathy J. Scott
Chapter7: Employee Earnings And Deductions
Section: Chapter Questions
Problem 4E
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Below are three independent and unrelated errors.
- On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $1,400. In January 2021, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following entry:
Salaries expense | 1,400 | |
Cash | 1,400 | |
- On the last day of 2020, Midwest Importers received a $82,000 prepayment from a tenant for 2021 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2021.
- At the end of 2020, Dinkins-Lowery Corporation failed to accrue interest of $7,200 on a note receivable. At the beginning of 2021, when the company received the cash, it was recorded as interest revenue.
Required:
For each error:
1. What would be the effect of each error on the income statement and the
2. Prepare any
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