Question
Lindy Company's auditor discovered two errors. No errors were corrected during 2020. The errors are described as follows: (1) Merchandise costing $4,400 was sold to
Lindy Company's auditor discovered two errors. No errors were corrected during 2020. The errors are described as follows:
-
(1) Merchandise costing $4,400 was sold to a customer for $9,400 on December 31, 2020, but it was recorded as a sale on January 2, 2021. The merchandise was properly excluded from the 2020 ending inventory. Assume the periodic inventory system is used.
-
(2) A machine with a five-year life was purchased on January 1, 2020. The machine cost $24,000 and has no expected salvage value. No depreciation was taken in 2020 or 2021. Assume the straight-line method for depreciation.
Required: Prepare appropriate journal entries (assume the 2021 books have not been closed). Ignore income taxes.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started