Create the required Journal entries to correct PC accounts

Assignment Help Financial Accounting
Reference no: EM132609043

You have been assigned to examine the financial statements of PC corp. for the year ended December 31, 2019, as prepared following IFRS. You discover the following situations:

1- Physical inventory count on Dec31, 2017, improperly excluded merchandise costing $13,000 that had been temporarily stored in a public warehouse. PC uses periodic inventory system

2- Physical inventory count on Dec31,2019, improperly included merchandise with a cost of $26,000 that had been recorded as a sale on Dec27, 2019, and was being held for the customer to pick up on Jan 4,2020

3- Depreciation of $6,700 for 2018 on delivery vehicles was not recorded

4- A collection of $4,600 on account from customer received on Dec 31,2019, was not recorded

5- A large piece of equipment was purchased on Jan 1, 2018 for $20,500 and was charged in error to repairs expense. The equipment estimated useful life 8 years and no residual value. PC uses straight-line depreciation method for this type of equipment.

6- On Dec 31, 2017 accrued wages of $1,500 were not recognized

7- An insurance premium paid on July 1, 2018 for policy expires on June 30, 2021, amount of $12,000 was charged to insurance expense. The policy covers 3 years of insurance

8- The Accountant recorded a purchase of supplies for $9,000 in 2017 that applied to 2018.

9- At the beginning of 2019, the company purchased equipment for $225,000 (residual value $22,500) and had useful life 6 years. The accountant used straight line amortization but failed to deduct the residual value in calculation the depreciation.

10- Jan 1, 2018, rented out an office space and received cheque for $44,000 the amount for 4 years rent 2018 to the end of 2021; the entire amount was credited to rental income.

Instructions:

Question 1: Prepare the required Journal entries (if any) to correct PC accounts, assuming each transaction is independent and assume 2019 books are not closed.

Reference no: EM132609043

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