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:

Zygomycota

A class of fungi characterized by their life cycle including a sexual phase that produces zygospores, often found as molds on food or organic matter.

Economic Importance

The significance of a particular sector, industry, or commodity in contributing to the economic health and growth of a region, country, or global economy.

Fungi

A domain of organisms capable of producing spores that consume organic matter, which includes entities such as molds, yeast, different types of mushrooms, and toadstools.

Products

In a chemical reaction, substances that are formed as a result of the reaction.