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(Corrected Trial Balance) The trial balance of Wanda Landowska Company shown below does not balance. Your review of the ledger reveals the following:
(a) Each account had a normal balance.
(b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100. (c) A transposition error was made in Accounts Receivable; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively.
(d) A debit posting to Advertising Expense of $300 was omitted.
(e) A $1,500 cash drawing by the owner was debited to Wanda Landowska, Capital, and credited to Cash.
Explain the significance of this transaction to an analyst. Explain the consequences of poor quality reporting. What has the U.S. government done to improve the quality of reporting after recent financial scandals, such as Enron?
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