Question

The following journal entries were prepared by an employee at the International Marketing Company who does not have an adequate knowledge of accounting.

General Journal

Date Description Post Ref. Debit Credit

2019

April 1 Accounts Payable $13,400

Fees Income $13,400

Performed services on credit

2 Cash $ 600

Telephone Expenses $ 600

Paid for March telephone service

Check 1917

3 Office equipment $ 8,000

Office Supplies $ 900

Cash $9400

Purchased file cabinet and office supply,

check 1918

(Assume that Office Equipment and Office Supplies were recorded at the correct values.)

Required:

Examine the above journal entries carefully and prepared the correct journal entries.

Analyze:

After the correct journal entries have been posted, what effect do the corrections have on the company's reported assets.

No Date General Journal Debit Credit

1 April 1, 2019 Accounts Receivable $ 13,400

Accounts Payable $ 13,400

2 April 2, 2019 Telephone Expenses $ 1,200

Cash $ 1,200

3 April 3, 2019 Office Equipment $ 8,000

Office Supplies $ 900

Cash $ 8,900

4 April 3, 2019 Cash $ 9,400

Office Equipment $8,000

Office Supplies $ 900

After the correcting journal entries have been posted, what effect do the corrections have on the companies reported assets?

Assets Increased By :

Answer 1

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