The reported net incomes for the first 2 years of Larkspur Products, Inc., were as follows: 2020,
Question:
The reported net incomes for the first 2 years of Larkspur Products, Inc., were as follows: 2020, $137,400; 2021, $181,200. Early in 2022, the following errors were discovered.
1. | Depreciation of equipment for 2020 was overstated $16,900. | |
2. | Depreciation of equipment for 2021 was understated $40,400. | |
3. | December 31, 2020, inventory was understated $54,200. | |
4. | December 31, 2021, inventory was overstated $17,500. |
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation | Debit | Credit |
---|---|---|
Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount |
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield