Patel Company has an inexperienced accountant. During the first 2 weeks on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. 1. A payment on account of $750 to a creditor was debited to Accounts Payable $570 and credited to Cash $570.2. The purchase of supplies on account for $560 was debited to Equipment $56 and credited to Accounts Payable $56.3. A $500 withdrawal of cash for N. Patel's personal use was debited to Salaries and Wages Expense $500 and credited to Cash $500.

Question

Business

Damaris Conner

12 May, 15:07

Patel Company has an inexperienced accountant. During the first 2 weeks on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. 1. A payment on account of $750 to a creditor was debited to Accounts Payable $570 and credited to Cash $570.2. The purchase of supplies on account for $560 was debited to Equipment $56 and credited to Accounts Payable $56.3. A $500 withdrawal of cash for N. Patel's personal use was debited to Salaries and Wages Expense $500 and credited to Cash $500.

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Heather Quinn · Answer 1

The correct entries are as follows:

a. Account payable A/c Dr $180 ($750 - $570)

To Cash A/c $180

(Being the correct amount is recorded)

b. Supplies A/c Dr $560

To Equipment A/c $56

To Account payable A/c $504 ($560 - $56)

(Being the correct amount is recorded)

c. N. Patel's Capital account A/c Dr $500

To Salaries and wages expense $500

(Being the adjusting entry is recorded)