Sara Yu, CA, was retained by Info Cable, Ltd. to prepare financial statements for April 2017. Yu

Question:

Sara Yu, CA, was retained by Info Cable, Ltd. to prepare financial statements for April 2017. Yu accumulated all the ledger balances per Info's records and found the following.

Sara Yu, CA, was retained by Info Cable, Ltd. to

Sara Yu reviewed the records and found the following errors.

1. Cash received from a customer on account was recorded as £950 instead of £590.

2. A payment of £75 for advertising expense was entered as a debit to Miscellaneous Expense £75 and a credit to Cash £75.

3. The first salary payment this month was for £1,850, which included £700 of salaries payable on March 31. The payment was recorded as a debit to Salaries and Wages Expense £1,850 and a credit to Cash £1,850. (No reversing entries were made on April 1.)

4. The purchase on account of a printer costing £310 was recorded as a debit to Supplies and a credit to Accounts Payable for £310.

5. A cash payment of repair expense on equipment for £125 was recorded as a debit to Equipment £152 and a credit to Cash £152.


Instructions

(a) Prepare an analysis of each error showing (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. Items 4 and 5 occurred on April 30, 2017.

(b) Prepare a correct trial balance.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Financial Accounting

ISBN: 978-1118978085

IFRS 3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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