Accounting Errors
The following errors in the accounting records of the Willis & Glassett Partnership were discovered on January 10, 2008.
|
|
Ending |
|
Accrued Rent |
Accrued Interest |
|
|
Inventories |
Depreciation |
Revenue Not |
Expense Not |
|
Year of Error |
Overstated |
Understated |
Recorded |
Recorded |
|
2005 |
$30,000 |
|
$ 7,000 |
|
|
2006 |
|
$12,000 |
21,000 |
|
|
2007 |
19,000 |
|
|
$3,000 |
The partners share net income and losses as follows: 60%, Willis; 40%, Glassett.
1. Prepare a correcting journal entry on January 10, 2008, assuming that the books were closed for 2007.
2. Prepare a correcting journal entry on January 10, 2008, assuming that the books are still open for 2007 and that the partnership uses the perpetual inventory system.