Error Analysis and Correction. Feinstein and Company completed an internal audit of its bookkeeping system that uncovered several errors. It discovered the errors on December 31 before the books were closed.
a. A $ 45,000 payment for advertising was recorded as an asset in an account entitled deferred advertising expense.
b. Payroll for the two weeks ending November 11 amounted to $ 123,500 and was never recorded. Payroll taxes withheld for this pay period were $ 8,500.
c. A three-year insurance policy for $ 90,000 acquired on April 1 of the current year was recorded by debiting insurance expense.
d. Sales tax was not recorded separately during the year. The company is required to collect 2% sales tax on its sales. The company’s credit sales amounted to $ 2,500,000 for the current year and there were no cash sales. Required » Prepare the journal entries needed to correct the above errors.