Casey Hartwig, CPA, was retained by Global Cable to prepare financial statements
ID: 2552130 • Letter: C
Question
Casey Hartwig, CPA, was retained by Global Cable to prepare financial statements for April 2017. Hartwig accumulated all the ledger balances per Global's records and found the following. GLOBAL CABLE Trial Balance April 30, 2017 Debit Credit $4,200 3,300 900 10,400 Cash Accounts Receivable Supplies Equipment Accumulated Depreciation-Equip Accounts Payable Salaries and Wages Payable Unearned Service Revenue Owner's Capital Service Revenue Salaries and Wages Expense Advertising Expense Miscellaneous Expense Depreciation Expense $1,340 2,200 800 900 12,360 5,800 3,300 500 250 550 $23,400 $23,400 Casey Hartwig reviewed the records and found the following errors. 1. Cash received from a customer on account was recorded as $850 instead of $500 2. A payment of $77 for advertising expense was entered as a debit to Miscellaneous Expense $77 and a credit to Cash $77 3. The first salary payment this month was for 1,800, which included $800 of salaries payable on March 31 . The payment was recorded as a debit to Salaries and Wages Expense $1,800 and a credit to 4. 5. Cash $1,800. (No reversing entries were made on April 1.) The purchase on account of a printer costing $330 was recorded as a debit to Supplies and a credit to Accounts Payable for $330 A cash payment of repair expense on equipment for $71 was recorded as a debit to Equipment $54 and a credit to Cash $54. Prepare an analysis of each error showing (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. Items 4 and 5 occurred on April 30, 2017. (Credit account titles are automaticallyExplanation / Answer
1)Incorrect entry:
Cash(db)850
account receivable(cr)850
Correct entry:
Cash(db)500
account receivable(cr)500
Correcting entry:
account receivable(db)350
Cash(cr)350
2)Incorrect entry:
Miscellaneous expense(db)77
cash(cr)77
Correct entry:
Advertising expense(db)77
cash(cr)77
Correcting entry:
Advertising expense(db)350
Miscellaneous expense(cr)77
3)Incorrect entry:
salaries and wages(db) 1800
cash(cr)1800
Correct entry:
salaries payable(db)800
salaries and wages expense(db)1000
cash(cr)1800
Correcting entry:
salaries payable(db)800
salaries and wages expense(cr)800
4)Incorrect entry:
supplies(db)330
accounts payable(cr)330
Correct entry:
printer(db)330
accounts payable(cr)330
Correcting entry:
printer(db)330
supplies(cr)330
4)Incorrect entry:
equipment(db)54
cash(cr)54
Correct entry:
miscellaneous expense(db)71
cash(cr)71
Correcting entry:
miscellaneous expense(db)71
equipment(cr)54
cash(cr)17