1. Below are four independent and unrelated errors found in 2024. Prepare the journal entries each company should record in 2024 to correct the errors (assume the 2023 books were closed, but the 2024 books have not been closed). Ignore income taxes.

Record the required entry ONLY. Write None if no entry is required. A cash account is never used in any correcting entries!

1) Wages of $15,000 incurred in 2023 but not paid until 2024 were recorded as an expense in 2024 instead of 2023.

2) On December 31, 2023, merchandising inventory was overstated by $25,000 due to a mistake in the physical count using the periodic inventory system.

3) Depreciation expense of $10,000 on equipment was mistakenly reported at $1,000 on the 2023 financial statements. This error was found at the beginning of 2024.

4) On December 12, 2023, an investment costing $80,000 was sold for $100,000. The total of the sale proceeds was credited to the investment account (trading security).

Answer rating: 100% (QA)

Here are the journal entries to correct the errors for each company in 2024 1 Wages incurred in 202... View the full answer