During 2014, the Following Independent Events Occurred at Sarajavo Corporation

question 60

Essay

During 2014, the following independent events occurred at Sarajavo Corporation on the dates indicated:
1. Sales were understated by $145,000 for 2013. This error was discovered on January 20, 2014, when trying to reconcile the accounts receivable balance.
2. On March 31, 2014, Sarajavo Corporation discovered that Depreciation Expense on factory equipment for the year ended December 31, 2013, had been recorded twice, for a total amount of $60,000 instead of the correct amount of $30,000.
3. On June 30, 2014, Sarajavo Corporation discovers that its 2013 cost of goods sold was overstated by $14,500 as a result in counting inventory.
Assume Sarajavo has a 20% income tax rate.
Instructions
Prepare any journal entries required as a result of the information provided.

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Definitions:

Hypothetical-Deductive Reasoning

The ability to consider propositions and probabilities, generate and systematically test hypotheses, and draw conclusions.

Metacognition

The awareness and understanding of one's own thought processes, allowing for the regulation and optimization of learning.

Multidimensional Thinking

The ability to perceive, analyze, and understand situations from multiple perspectives and dimensions.

Relativistic Terms

Concepts or words that are understood in relation to other concepts or contexts, and whose meanings can vary depending on those relationships.