Early in January 2009, the internal auditors for Arkansas Inc. discovered these errors and omissions in their review of the 2008 financial records. Arkansas Inc. has not yet closed its books for 2008.
1. A $1,600 sale made to Ed's Automotive in December, 2008 was incorrectly charged to the account of Ed's Upholstery.
2. A $21,000 premium for a one-year fire and extended coverage insurance policy covering the policy period May 1, 2008 to April 30, 2009, was initially recorded as expense and has not been adjusted.
3. The December 31, 2007, balance of accounts receivable was materially overstated by $18,000.
Required: Prepare any necessary entries required for the above items. Ignore income taxes.

Question

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The Answer of Early in January 2009, the internal auditors for Arkansas Inc. discovered these errors and omissions in their review of the 2008 financial records. Arkansas Inc. has not yet closed its books for 2008.
1. A $1,600 sale made to Ed's Automotive in December, 2008 was incorrectly charged to the account of Ed's Upholstery.
2. A $21,000 premium for a one-year fire and extended coverage insurance policy covering the policy period May 1, 2008 to April 30, 2009, was initially recorded as expense and has not been adjusted.
3. The December 31, 2007, balance of accounts receivable was materially overstated by $18,000.
Required: Prepare any necessary entries required for the above items. Ignore income taxes.

Early in January 2009, the Internal Auditors for Arkansas Inc