Question 1 On October 5, Ivanhoe Company buys merchandise onaccount from Pharoah Company. The selling price of the goods is$5,240, and the cost to Pharoah Company is $3,180. On October 8,Ivanhoe Company returns defective goods with a selling price of$640 and a scrap value of $310. Record the transactions on thebooks of Pharoah Company, assuming a perpetual approach. (If noentry is required, select "No Entry" for the account titles andenter 0 for the amounts. Credit account titles are automaticallyindented when amount is entered. Do not indent manually. Recordjournal entries in the order presented in the problem.) DateAccount Titles and Explanation Debit Credit choose a transactiondate enter an account title to record credit sales Inventory entera debit amount enter a credit amount enter an account title torecord credit sales Accounts Payable enter a debit amount enter acredit amount (To record credit sales) enter an account title torecord cost of goods sold on account Accounts Payable enter a debitamount enter a credit amount enter an account title to record costof goods sold on account Inventory enter a debit amount enter acredit amount (To record cost of goods sold on account) choose atransaction date enter an account title to record credit grantedfor receipt of returned goods Accounts Receivable enter a debitamount enter a credit amount enter an account title to recordcredit granted for receipt of returned goods Sales Revenue enter adebit amount enter a credit amount (To record credit granted forreceipt of returned goods) enter an account title to record scrapvalue of goods returned enter a debit amount enter a credit amountenter an account title to record scrap value of goods returnedenter a debit amount enter a credit amount (To record scrap valueof goods returned)
Question 1 On October 5, Ivanhoe Company buys merchandise onaccount from Pharoah Company. The selling price of the goods is$5,240, and the cost to Pharoah Company is $3,180. On October 8,Ivanhoe Company returns defective goods with a selling price of$640 and a scrap value of $310. Record the transactions on thebooks of Pharoah Company, assuming a perpetual approach. (If noentry is required, select "No Entry" for the account titles andenter 0 for the amounts. Credit account titles are automaticallyindented when amount is entered. Do not indent manually. Recordjournal entries in the order presented in the problem.) DateAccount Titles and Explanation Debit Credit choose a transactiondate enter an account title to record credit sales Inventory entera debit amount enter a credit amount enter an account title torecord credit sales Accounts Payable enter a debit amount enter acredit amount (To record credit sales) enter an account title torecord cost of goods sold on account Accounts Payable enter a debitamount enter a credit amount enter an account title to record costof goods sold on account Inventory enter a debit amount enter acredit amount (To record cost of goods sold on account) choose atransaction date enter an account title to record credit grantedfor receipt of returned goods Accounts Receivable enter a debitamount enter a credit amount enter an account title to recordcredit granted for receipt of returned goods Sales Revenue enter adebit amount enter a credit amount (To record credit granted forreceipt of returned goods) enter an account title to record scrapvalue of goods returned enter a debit amount enter a credit amountenter an account title to record scrap value of goods returnedenter a debit amount enter a credit amount (To record scrap valueof goods returned)
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Exercise 22-16
You have been engaged to review the financial statements of TealCorporation. In the course of your examination, you conclude thatthe bookkeeper hired during the current year is not doing a goodjob. You notice a number of irregularities as follows.
1. | Year-end wages payable of $3,130 were not recorded because thebookkeeper thought that âthey were immaterial.â | |
2. | Accrued vacation pay for the year of $34,100 was not recordedbecause the bookkeeper ânever heard that you had to do it.â | |
3. | Insurance for a 12-month period purchased on November 1 of thisyear was charged to insurance expense in the amount of $2,724because âthe amount of the check is about the same every year.â | |
4. | Reported sales revenue for the year is $2,141,200. This includesall sales taxes collected for the year. The sales tax rate is 6%.Because the sales tax is forwarded to the stateâs Department ofRevenue, the Sales Tax Expense account is debited. The bookkeeperthought that âthe sales tax is a selling expense.â At the end ofthe current year, the balance in the Sales Tax Expense account is$104,600. |
Prepare the necessary correcting entries, assuming that Teal uses acalendar-year basis. The books for the current year have not beenclosed. (Credit account titles are automaticallyindented when amount is entered. Do not indent manually. If noentry is required, select "No Entry" for the account titles andenter 0 for the amounts.)
No. | Account Titles and Explanation | Debit | Credit |
1. | |||
2. | |||
3. | |||
4. | |||
(To record the sales taxes due.) | |||
(To correct prior entry.) |
