An Examination of the Accounts of Zin Company for the Month

question 13

Essay

An examination of the accounts of Zin Company for the month of June revealed the following errors after the transactions were journalized and posted. Prepare correcting entries for each of the above assuming the erroneous entries are not reversed.
1. A collection of $750 from R. Joseph, a customer on account, was debited to Cash $750 and credited to Service Revenue, $750.
2. A payment for Advertising Expense costing $620 was debited to Utilities Expense, $260 and credited to Cash $260.
3. A bill for $710 for Supplies purchased on account was debited to Equipment, $170 and credited to Accounts Payable $170.

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Definitions:

Markup Over Cost

The ratio or percentage by which a product’s selling price exceeds its cost, effectively representing the gross profit margin.

Consolidated Cost Of Goods Sold

The total cost of goods that have been sold by a parent company and its subsidiaries, presented as a single figure in consolidated financial statements.

Intra-entity Transfers

Transactions that occur between two units within the same company, such as the transfer of goods or services from one department to another.

Consolidated Sales

The total sales revenue of a company and its subsidiaries combined, presented as a single figure in financial statements.