Faulty Company's year end ifs December 31. Its external auditors have discovered that two years ago a couple of transactions were put through Faulty's books twice: Dr Cash $58,820 Cr Miscellaneous Revenue $58,820 Dr Rent Expense $37,600 Cr Cash $37,600 Assume that Faulty has such an incompetent bookkeeper that no bank reconciliations has been done since then. Solve the situation in one journal entry and ignore income tax implications. Required 1: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when credited? $ Required 2: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when debited? $ Required 3: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when credited? $ Required 4: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when debited? $ Required 5: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Miscellaneous?

Answer rating: 100% (QA)

Faulty Company Journal Entry Correction To correct the doublerecorded transactionswe need to reverse ... View the full answer