Questions: Crane Company discovered the following errors made in January 2027. 1. A payment of Salaries and Wages Expense of 360 was debited to Equipment and credited to Cash, both for 360. 2. A collection of 5,200 from a client on account was debited to Cash 520 and credited to Service Revenue 520. 3. The purchase of equipment on account for 350 was debited to Equipment 530 and credited to Accounts Payable 530. (a) Correct the errors by reversing the incorrect entry and preparing the correct entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. No. Account Titles and Explanation Debit Credit 1. (To reverse the incorrect entry) (To record the correct entry) 2. (To reverse the incorrect entry)

To correct the errors made by Crane Company in January 2027, we need to reverse the incorrect entries and then record the correct entries. Let's address each error one by one:

Incorrect Entry:

• Debited Equipment: $360
• Credited Cash: $360

Correct Entry:

• Debited Salaries and Wages Expense: $360
• Credited Cash: $360

Correction Steps:

1. Reverse the Incorrect Entry:

   • Debit Cash: $360
   • Credit Equipment: $360

2. Record the Correct Entry:

   • Debit Salaries and Wages Expense: $360
   • Credit Cash: $360

Incorrect Entry:

• Debited Cash: $520
• Credited Service Revenue: $520

Correct Entry:

• Debited Cash: $5,200
• Credited Accounts Receivable: $5,200

Correction Steps:

1. Reverse the Incorrect Entry:

   • Debit Service Revenue: $520
   • Credit Cash: $520

2. Record the Correct Entry:

   • Debit Cash: $5,200
   • Credit Accounts Receivable: $5,200

Incorrect Entry:

• Debited Equipment: $530
• Credited Accounts Payable: $530

Correct Entry:

• Debited Equipment: $350
• Credited Accounts Payable: $350

Correction Steps:

1. Reverse the Incorrect Entry:

   • Debit Accounts Payable: $530
   • Credit Equipment: $530

2. Record the Correct Entry:

   • Debit Equipment: $350
   • Credit Accounts Payable: $350

For each error, we first reverse the incorrect entry by swapping the debit and credit accounts and then record the correct entry with the appropriate amounts and accounts. This ensures that the financial records accurately reflect the transactions that occurred.