Essay Questions
208.On December 31, the year end, a company forgot to record $6,000 of depreciation on machinery. In the current year financial statements, what is the effect of this error on assets, net income, and equity?
209.Using the table below, indicate the impact of the following errors made during the adjusting entry process. Use a "+" for overstatements, a "-" for understatements, and a "0" for no effect. The first one is provided as an example.
Error
Revenues
Expenses
Assets
Liabilities
Equity
Ex.Did not record depreciation for this period0-+0+
1.Did not record unpaid telephone bill
2.Did not adjust unearned revenue account for revenue earned this period.
3.Did not adjust shop supplies for supplies used this period
4.Did not accrue employee salaries for this period
5.Recorded rent expense owed with a debit to insurance expense and a credit to rent payable
210.Andrew Inc.'s net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.
211.A company's employees earn a total of $10,000 per week for a 5-day week that begins on Monday. December 31 of Year 1 is a Monday, and all 20 employees worked that day.
a) Prepare the required adjusting journal entry to record accrued salaries on December 31, Year 1.
b) Prepare the journal entry to record the payment of salaries on January 4, Year 2.