Lindy Company's auditor discovered two errors. No errors were corrected during 2012. The errors are described as follows:
(1.) Merchandise costing $4,000 was sold to a customer for $9,000 on December 31, 2012, but it was recorded as a sale on January 2, 2013. The merchandise was properly excluded from the 2012 ending inventory. Assume the periodic inventory system is used.
(2.) A machine with a five-year life was purchased on January 1, 2012. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2012 or 2013. Assume the straight-line method for depreciation.
Required:
Prepare appropriate journal entries (assume the 2013 books have not been closed). Ignore income taxes.

Question

Quizplus · Accepted Answer

The Answer of Lindy Company's auditor discovered two errors. No errors were corrected during 2012. The errors are described as follows:
(1.) Merchandise costing $4,000 was sold to a customer for $9,000 on December 31, 2012, but it was recorded as a sale on January 2, 2013. The merchandise was properly excluded from the 2012 ending inventory. Assume the periodic inventory system is used.
(2.) A machine with a five-year life was purchased on January 1, 2012. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2012 or 2013. Assume the straight-line method for depreciation.
Required:
Prepare appropriate journal entries (assume the 2013 books have not been closed). Ignore income taxes.

Lindy Company's Auditor Discovered Two Errors