Question

Mona Kamaka, CPA, was retained by Marin Inc. to prepare financial statements for the month of March 2020. Mona accumulated all the ledger balances from the business records and found the following: Marin Inc. Trial Balance March 31, 2020 Credit Debit $8,060 3.920 1,010 16,800 Cash Accounts receivable Supplies Equipment Accumulated depreciation-equipment Accounts payable Salaries and wages payable Unearned revenue Common shares Retained earnings Service revenue Salaries and wages expense Advertising expense Utilities expense Depreciation expense Repairs and maintenance expense $3,360 6,660 670 1,680 11.200 4,660 8.960 4,030 900 350 780 1.340 $37.190 $37.190 Mona reviewed the records and found the following errors: 1. 2. 3. 4. Cash received from a customer on account was recorded as $580 instead of $850. The purchase, on account, of equipment that cost $1,010 was recorded as a debit to Supplies and a credit to Accounts Payable for $1,010 Apayment of $34 for advertising expense was entered as a debit to Utilities Expense, $34, and a credit to Cash, $34. The first salary payment this month was for $2,020, which included $670 of salaries and wages payable on February 28. The payment was recorded as a debit to Salaries and Wages Expense of $2,020 and a credit to Cash of $2,020. The business does not use reversing entries. A cash payment for Repairs and Maintenance Expense on equipment for $100 was recorded as a debit to Equipment, $100, and a credit to Cash $100. 5.

Answer 1

Solutions:

No Incorrect Entry Account Titles and Explanation 1 Cash Accounts Receivable Debit Credit 580) 580 1010 2 Supplies Accounts Payable 1010 34 3 Utilities Cash 34 2020 4 Salaries and Wages Expense Cash 2020 100 5 Equipment Cash 100

No Correct Entry Account Titles and Explanation Debit Credit 1 Cash 850 Accounts Receivable 850 1010 2 Equipment Accounts Payable 1010 34 3 Advertising Expense Cash 34 2020 4 Salaries and Wages Expense Salaries and Wages Payable Cash 670 1350 100 5 Repairs Expense Cash 100

No Credit Correcting Entry Account Titles and Explanation Debit 1 Cash Accounts Receivable 270 270 1010 2 Equipment Supplies 1010 34 3 Advertising Expense Utilities 34 670 4 Cash Salaries and Wages Payable 670 100 5 Repairs Expense Equipment 100

3360 6660 Marlin Inc Cash 9000 Accounts Receivable 3650 Supplies 0 Equipment 17710 Accumulated Depreciation - equipment Accounts Payable Salaries and Wages Payable Unearned Revenue Common Shares Retained Earnings Service Revenue Salaries and Wages Expense 4030 Advertising Expense 934) Utilities Expense 316) Depreciation Expense 780 Repairs and Maintenance expen 1440 Totals 37860 1340 1680 11200 4660 8960 37860

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