Remington Company Discovered the Following Errors Made in January 2015

question 95

Essay

Remington Company discovered the following errors made in January 2015
1. A payment of salaries and wages of $1,000 was debited to Equipment and credited to Cash, both for $1,000. Remington recorded $200 of depreciation on this "equipment".
2. A collection of $3,000 from a client on account was debited to Cash $300 and credited to Service Revenue $300.
3. The purchase of supplies on account for $840 was debited to Supplies $480 and credited to Accounts Payable $480.
4. The purchase of short-term investments for $1,500 cash was debited to Prepaid Rent and credited to Cash. At year end, $500 of the "prepaid rent" was recorded as rent expense.
Instructions
(a) Correct the errors by reversing the incorrect entry and preparing the correct entry.
(b) Correct the errors without reversing the incorrect entry.

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Definitions:

Physiology

The branch of biology that studies the functions and mechanisms occurring in living organisms.

Introspection

The examination or observation of one's own mental and emotional processes.

Consciousness

The state of being aware of and able to think about oneself, one's surroundings, and one's thoughts and feelings.

Functionalism

In psychology, a theory that considers mental life and behavior in terms of active adaptation to the person's environment.