You've Been Asked to Review the Following Balance Sheet Which

Essay

You've been asked to review the following balance sheet which has been prepared by a new staff member.

a.Prepare the journal entries for the following transactions:
1.Merchandise purchased on account and costing $5,000 was received but not recorded.
2.Payments by clients for previously billed invoices were found in the receptionist's desk drawer. The checks totaled $2,100.
3.Written checks totaling $2,700 for payment of accounts payable, were found in the treasurer's desk drawer. He was going to mail them out next Monday.
4.It was discovered that the company president had hired a new secretary for an annual salary of $18,250.
5.Upon further investigation, you found that the company had paid but incorrectly recorded next year's fire insurance policy, totaling $3,600. The payment was recorded as an expense.

b.Prepare a corrected balance sheet.