In 2013, the internal auditors of Blooper Inc. discovered that goods costing $12 million that were shipped f.o.b. shipping point in December of 2012 were in transit on December 31. The goods were recorded as a purchase in December of 2012 but were not included in the 2012 year-end inventory.

Required: Prepare the journal entry needed in 2013 to correct the error. Also, briefly describe any other measures Blooper would take in connection with correcting the error. (Ignore income taxes.)

U= Understated O= Overstated