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suter [353]
3 years ago
6

The following journal entries were prepared by an employee of International Marketing Company who does not have an adequate know

ledge of accounting. GENERAL JOURNAL PAGE 3 Date Description Post. Ref. Debit Credit 2019 April 1 Accounts Payable 15,800 Fees Income 15,800 Performed services on credit 2 Cash 600 Telephone Expense 600 Paid for March telephone service, Check 1917 3 Office Equipment 8,200 Office Supplies 900 Cash 9,500 Purchased file cabinet and office supplies, Check 1918 (Assume that Office Equipment and Office Supplies were recorded at the correct values.) Required: Examine the above journal entries carefully and prepare the correcting journal entries. Analyze: After the correct journal entries have been posted, what effect do the corrections have on the company’s reported assets?
Business
2 answers:
Helen [10]3 years ago
7 0

Answer:

April 1st

accounts receivable    15,800 debit

           accounts payable         15,800 credit

_____________________________________

telephone expense     1,200 debit

        cash                             1,200 credit

_____________________________________

cash       9,500  debit

  equipment      8,200 credit

  supplies             900 credit

-- to eliminate a wrong post---

supplies        900 debit

equipment 8,200 debit

      cash           9,500 credit

--to record the correct transaction--

___________________________________

Net effect on assets:

AR 15,800

Cash Decrease by 1,000

Explanation:

April 1st: we should use account receivable as we are going to receive cash in the future. We aren't going to pay it.

this will increase assets by 15,800 rather than decrease liabilities.

April 2nd: It should be backwards.

the effect will be a decrease in cash for 1,200 (600 to amend the mistake and 600 to show a disbursement

April 3rd we should decrease cash by 400 as the sum of the purchase is 9,100 not 9,500

As we can't you put a debit on cash we reverse the wrong entry adn do the proper one.

Real effect:

pav-90 [236]3 years ago
4 0
<h3>April 1st </h3>

accounts receivable 15,800 (D)

accounts payable 15,800 (C)

telephone expense 1,200 (D)

cash 1,200 (C)

9,500 cash (D)

equipment 8,200 (C)

supplies 900 (C)

to eliminate a wrong post

supplies 900 (D)

equipment 8,200 (D)

9,500 cash (C)

to record the correct transaction

<h3>The net effect on assets: </h3>

AR 15,800

Cash Decrease by 1,000

<h2>Further Explanation </h2>

Recording Transactions in a Journal (Journaling) - Business transactions that occur on each account will be recorded in the general ledger in accordance with the group of accounts. For example, transactions related to cash will be recorded in the cash ledger, accounts receivable transactions will be recorded in the accounts receivable ledger and so on.

In practice, the recording of business transactions is not directly recorded in the ledger but must be recorded in a journal (journalizing) first so as not to cause errors in the recording or the next accounting cycle.

In accounting, a journal is a tool used to record business transactions that are carried out chronologically by showing accounts/debits and credits and their amounts.

The journal will record the transaction and determine the opposite of the transaction so that there is a balance, for example, if there is a sale in cash, the Cash will be debited and the Sales will be credited. In essence, the amount of debt must be the same as the amount of credit.

Learn More

Journaling  brainly.com/question/13401367

Business Transaction  brainly.com/question/13401367

Details

Grade: College

Subject: Business

Keyword: journal, transaction, receivable

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SDJ, Inc., has net working capital of $2,060, current liabilities of $5,550, and inventory of $1,250.
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Answer:

1.

Current ratio = 1.37 times

2.

Quick Ratio = 1.15 times

Explanation:

The current ratio and quick ratios both are measures to assess the liquidity position of businesses. These are useful indicators of how well the business is equipped to meet its current obligations using its liquid assets.

To calculate these ratios, we must first determine the value of current assets. We are given the value of net working capital. The net working capital is the difference between the current assets and the current liabilities.

Net Working capital = Current assets - Current Liabilities

2060 = Current Assets - 5550

2060 + 5550 = Current Assets

Current assets = $7610

<u>Requirement 1.</u>

The current ratio is calculated as follows,

Current Ratio = Current Assets / Current Liabilities

Current ratio = 7610 / 5550

Current Ratio = 1.3711 rounded off to 1.37 times

<u />

<u>Requirement 2.</u>

The quick ratio is calculated as follows,

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

Quick Ratio = (7610 - 1250) / 5550

Quick Ratio = 1.1459 rounded off to 1.15 times

6 0
3 years ago
which statement was true in the past but is not generally true today? A. the training and education costs for some jobs will pro
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7 0
3 years ago
Ricardo's Mexican Restaurant incurred salaries expense of $62,000 for 2018. The payroll expense includes employer FICA tax, in a
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Answer:

1. Journalize Ricardo's expenses for employee benefits and for payroll taxes. Explanations are not required.

Assuming Ricardo has not yet paid the expenses:

XX, 2018, employee benefits and payroll tax expenses

Dr FICA tax (OASDI) expense 3,844

Dr FICA tax (Medicare) expense 899

Dr FUTA tax expense 132

Dr SUTA tax expense 1,188

Dr Worker health insurance 3,000

Dr Worker life insurance 330

Dr 401k plan 6,200

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    Cr FICA tax (Medicare) payable 899

    Cr FUTA tax payable 132

    Cr SUTA tax payable 1,188

    Cr Worker health insurance payable 3,000

    Cr Worker life insurance payable 330

    Cr 401k plan payable 6,200

If Ricardo has already paid the expenses and benefits, you should only credit cash for $15,593

2. What was Ricardo's total expense for 2018 related to payroll?

$15,593 + $62,000 = $77,593

Explanation:

salaries expense $62,000

FICA taxes (OASDI) = $62,000 x 6.2% = $3,844

FICA taxes (Medicare) = $62,000 x 1.45% = $899

FUTA taxes = $22,000 x 0.6% = $132

SUTA taxes = $22,000 x 5.4% = $1,188

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6 0
3 years ago
Lacuna Inc. factors $12,000,000 of its accounts receivables with recourse for a finance charge of 3%. The finance company retain
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Answer:

The loss on transfer of receivables is $960,000

Explanation:

Sales amount                                       $12,000,000

Finance charge 3%*$12 million              ($360,000)

Retention amount 10%*$12 million           ($1,200,000)

Cash upfront                                           $ 10,440,000

The recourse liability is $600,000,which means that additional liability of $600,000 would be incurred by Lacuna Inc, if the total amount from the receivables is not received owing to the fact that the factoring is with recourse.

The loss on transfer of receivables is shown as:

Finance charge                    $360,000

Recourse liability                  $600,000

total loss                                 $960,000

5 0
3 years ago
The Cutting Department of Sheridan Company has the following production and cost data for July.
alina1380 [7]

Answer:

1.                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost per Equivalent Unit                    $ 4.05                           $ 2.6

Explanation:

Cutting Department

Weighted-Average Method

1. Equivalent Units

Particulars              Units       % of Completion       Equivalent Units

                                     Materials Conversion   Materials Conversion

Transferred Out    13,700     100         100             13,700      13,700

<u>Ending Inventory     3500      100          60             3500        2100    </u>

<u>Total Equivalent Units                                             17,200      15,800  </u>

<em>The Ending Inventory  units are 3500 which are not yet complete. </em>

                                                                   Materials       Conversion Costs

Total equivalent units of production        17,200                  15,800  

2. Cost Per Equivalent Units

                                                    Materials         Conversion

Cost Added                               69,660                18,480 + 22,600

                             

Total Costs                                69,660                  41,080

Equivalent Units                       <u> 17,200                    15,800 </u>

Cost per Equivalent Unit             69,660 / 17,200         41,080/ 15,800  

                                                    $ 4.05                           $ 2.6

Cost of Ending Work In Process  $ 19635

Materials = 3500 * $ 4.05= $ 14175

Conversion = 2100 * $ 2.6=  $ 5460

We multiply the equivalent number of units with the cost per unit to find the cost.

Cost Of Units Transferred Out = $ 91,105

Materials = 13,700 * $ 4.05= $ 55,485

Conversion = 13,700 * $ 2.6 =  $ 35620

B. A Cost Reconciliation Report

                                    Materials              Conversion

Ending WIP                     $ 14175                  $ 5460

<u>Transferred Out             $ 55,485              $ 35620</u>

<u />

<u>Total                                 $ 69660                 41080   </u>

These calculated costs reconcile with the costs given in the above data.

                                                  Materials              Conversion

<u>Cost Added                               69,660                18,480 + 22,600</u>

<u>Total Costs                                69,660                  41,080</u>

<u></u>

These costs reconcile with the given costs.

5 0
3 years ago
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