In an audit of What2Do for the year ended 12/31/x2, you found an account titled Other...

 

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In an audit of What2Do for the year ended 12/31/x2, you found an account titled "Other Revenue and Expense (net)". Journal entries to this account in 20x2 were as follows: Dates Description Proceeds from monthly sales of scrap Amount $5,843 January 1, 20x2 through December 31, 20x2 January 18, 20x2 Recovery of previously written of Account Receivable from Wilshire $4,381 Company Cash proceeds from sale of old machine with cost of $10,000 and accumulated depreciation of $8,000 as of February 1, February 1, 20x2 $3,500 20x2. The machine had not been removed from the ledger. Refund of Property Insurance Premium for period April 1, 20x2 - March 30, 20X3 Reduction of Inventory to Lower of Cost or Market Lawsuit filed by terminated employee; no likelihood of litigation established April 8, 20x2 $600 December 31, 20x2 ($1,800) December 31, 20x2 ($500,000) Balance per Ledger ($487,476) Miscellaneous Revenue and Expenses (Net) Required: A. In the space below, provide a proposed adjusting journal entry at December 31, 20X2, for What2Do Company's Miscellaneous Revenue and Expense Account (net). B. What do you propose to What2Do Company regarding this account to improve financial reporting? In an audit of What2Do for the year ended 12/31/x2, you found an account titled "Other Revenue and Expense (net)". Journal entries to this account in 20x2 were as follows: Dates Description Proceeds from monthly sales of scrap Amount $5,843 January 1, 20x2 through December 31, 20x2 January 18, 20x2 Recovery of previously written of Account Receivable from Wilshire $4,381 Company Cash proceeds from sale of old machine with cost of $10,000 and accumulated depreciation of $8,000 as of February 1, February 1, 20x2 $3,500 20x2. The machine had not been removed from the ledger. Refund of Property Insurance Premium for period April 1, 20x2 - March 30, 20X3 Reduction of Inventory to Lower of Cost or Market Lawsuit filed by terminated employee; no likelihood of litigation established April 8, 20x2 $600 December 31, 20x2 ($1,800) December 31, 20x2 ($500,000) Balance per Ledger ($487,476) Miscellaneous Revenue and Expenses (Net) Required: A. In the space below, provide a proposed adjusting journal entry at December 31, 20X2, for What2Do Company's Miscellaneous Revenue and Expense Account (net). B. What do you propose to What2Do Company regarding this account to improve financial reporting?

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