Exercise 5-11 An inexperienced accountant for Wildhorse Co. made the following errors in recording merchandising transactions....
Exercise 5-11
An inexperienced accountant for Wildhorse Co. made the following errors in recording merchandising transactions.
| 1. | A $320 refund to a customer for faulty merchandise was debited to Sales Revenue $320 and credited to Cash $320. | |
| 2. | A $191 credit purchase of supplies was debited to Inventory $191 and credited to Cash $191. | |
| 3. | A $270 sales discount was debited to Sales Revenue. | |
| 4. | A cash payment of $21 for freight on merchandise purchases was debited to Freight-Out $210 and credited to Cash $210. |
Prepare separate correcting entries for each error, assuming that
the incorrect entry is not reversed. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|
1. |
|||
|
2. |
|||
|
3. |
|||
|
4. |
|||
Homework Answers
1. Customer A/c Dr. $320
To Sales Revenue A/c. $320
As sales which was wrongly debited will be credited and Customer will be debited.
2. Cash A/c. Dr. $191
To Supplier A/c. $191
As it is credit purchase the cash A/c will be debited and supplier A/c will be credited
3. Sales Discount A/c Dr. $270
To Sales Revenue A/c $270
As sales revenue was debited so correct entry will be sales revenue will be credited and Sales discount will be debited
4. Cash A/c Dr. $189
To Freight Out A/c. $189
As amount was wrongly entered so the difference amount of $189 ($210-$21) shall be reversed)
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Exercise 5-11
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Question 2 View Policies Current Attempt in Progress Wildhorse Company discovered the following errors made in January 2020. 1. Apayment of Salaries and Wages Expense of $300 was debited to Equipment and credited to Cash, both for $300. 2. A collection of $5,400 from a client on account was debited to Cash $540 and credited to Service Revenue $540. 3. The purchase of equipment on account for...
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credited to Accounts Payable $450.
No. Account Titles and Explanation Credit Debit 580...
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