You are to assume the role of the senior accountant at Monaco Company. The manager of the company wants you to correct journal entries and errors made in your absence.
For the past few weeks, a temporary employee has been filling in as bookkeeper. When you returned from time off, you discovered the following errors were made in the journals. All incorrect entries were posted.
- A payment on account of $830 to a creditor was debited to Accounts Payable $380 and credited to Cash $380.
- The purchase of supplies on account for $500 was debited to Equipment $50 and credited to Accounts Payable $50.
- A $400 withdrawal of cash by the manager for personal use was debited to Salaries Expense $400 and credited to Cash $400.
- The purchase of $1,200 of office equipment on account, with a three-year useful life and no residual value, was debited to Office Supplies and credited to Accounts Payable
You have a meeting with the manager to discuss the preliminary accounting numbers and the errors that need to be fixed. You will prepare the correct journal entries and fix the errors and explain them to the manager. You will also prepare any adjusting entries necessary for the office equipment.
