1. When DeSoto Water Works purchased a machine at the end of 2015 at a cost of $67,000, the company debited Buildings and credited Cash $67,000. The error was discovered in 2016.

Prepare the journal entry DeSoto will use to correct the error (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. In 2016, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $276,000 cost of a machine purchased on January 1, 2013. The machines useful life was expected to be four years with no residual value. Straight-line depreciation is used by PKE.

Ignoring income taxes, prepare the journal entry PKE will use to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. In 2016, the internal auditors of Development Technologies, Inc., discovered that (a) 2015 accrued wages of $1.1 million were not recognized until they were paid in 2016 and (b) a $2.1 million purchase of merchandise in 2016 was recorded in 2015 instead. The physical inventory count at the end of 2015 was correct.

Ignoring income taxes, prepare journal entry to correct each error in 2016. (If no entry is required for a particular event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

a. Record journal entry to correct error in wages.

b. Record journal entry to correct error in merchandise purchases.