Mitchell Incorporated is a wholesale distributor for electronic parts. Financial statements for the years ended December 31, 2020 and 2021, reported the following amounts and subtotals:
Year	Assets	Liabilities	Shareholders Equity	Net Income	Expenses
2020	$740,000	$330,000	$410,000	$210,000	$150,000
2021	820,000	400,000	420,000	230,000	175,000

In 2022, the following situations occurred or came to light:

a. Internal auditors discovered that ending inventories reported on the financial statements the two previous years were misstated due to faulty internal controls. The errors were in the following amounts:

2020 inventory Overstated by $12,000 2021 inventory Understated by $10,000 b. A patent costing $18,000 at the beginning of 2020 was expected to benefit operations for a total of six years. The entire amount was debited to patents. However, it has not been amortized since acquired. c. Mitchells equipment was depreciated by the sum-of-the-years-digits (SYD) basis since it was acquired at the beginning of 2020 at a cost of $30,000. It has an expected useful life of five years, and no expected residual value. At the beginning of 2022, Mitchell decided to switch to straight-line depreciation. d. A four-year casualty insurance policy was purchased at the beginning of 2020 for $36,000. The full amount was debited to insurance expense at the time. No adjusting entries were made regarding the casualty insurance policy. e. At the end of 2021, the company failed to accrue salaries of $12,000. The expense was recorded in 2022 when the salaries were paid. Mitchells books are closed for 2020 and 2021 but are still open in 2022.

INSTRUCTIONS: For each situation, prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry required for 2022 related to each situations described. (Ignore income taxes.)