Exercise Static Error correction; three errors LO
Below are three independent and unrelated errors.
On December WolfeBache Corporation failed to accrue salaries expense of $ In January when it paid employees for the December January workweek, WolfeBache made the following entry:
tableGeneral Journal,Debit,CredittableSalaries expenseCash
On the last day of Midwest Importers received a $ prepayment from a tenant for rent of a building. Midwes recorded the receipt as rent revenue. The error was discovered midway through
At the end of DinkinsLowery Corporation failed to accrue interest of $ on a note receivable. At the beginning of when the company received the cash, it was recorded as interest revenue.
Required:
For eacherror:
What would be the effect of each error on the income statement and the balance sheet in the financial statements?
Prepare any journal entries each company should record in to correct the errors.
