Using the information from BE21-12, prepare the journal entry necessary to correct the inventory error, assuming that Barin’s controller discovered the error in 2021 after the books had been closed for 2020. Ignore any income tax effects.

Data from Exercises 12

Barin Retail Outlets incorrectly recorded inventory in 2020. Rather than recording ending inventory as $960,000, Barin’s accounting manager entered $690,000, understating ending inventory by $270,000. Barin’s controller discovered the error in 2022. Prepare the journal entry necessary to correct the inventory error, ignoring any income tax effects.