Question
Lindy Company's auditor discovered two errors. No errors were corrected during 2010. The errors are described as follows: Merchandise costing $4,000 was sold to a
Lindy Company's auditor discovered two errors. No errors were corrected during 2010. The errors are described as follows: Merchandise costing $4,000 was sold to a customer for $9,000 on December 31, 2010. but it was recorded as a sale on January 2, 2011. The mechandise was properly excluded from the 2010 ending inventory. Assume the periodic inventory system is used. A machine with a 5-year life was purchased on January 1, 2010. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2010 or 2011. Assume the straight-line method for depreciation. Requried: Prepare appropriate journal entries (assume the 2011 books haven't been closed). Ignore income taxes.
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