Lindy Company's auditor discovered two errors. No errors were corrected during 2017. The errors are described as follows: (1.) Merchandise costing $4,200 was sold to a customer for $9,200 on December 31, 2017, but it was recorded as a sale on January 2, 2018. The merchandise was properly excluded from the 2017 ending inventory. Assume the periodic inventory system is used.(2.) A machine with a five-year life was purchased on January 1, 2017. The machine cost $22,000 and has no expected salvage value. No depreciation was taken in 2017 or 2018. Assume the straight-line method for depreciation.Required:Prepare appropriate journal entries (assume the 2018 books have not been closed). Ignore income taxes.

Name: Lindy Company's auditor discovered two errors. No errors were correcte
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Description: Lindy Company's auditor discovered two errors. No errors were corrected during 2017. The errors are described as follows: (1.) Merchandise costing $4,200 was sold to a customer for $9,200 on December 31, 2017, but it was recorded as a sale on January

Periodic Inventory System:- It is the form of an inventory valuation system where the physical count…

Answered: Lindy Company's auditor discovered two…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 13P: Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the...

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Lindy Company's auditor discovered two errors. No errors were corrected during 2017. The errors are described as follows:

(1.) Merchandise costing $4,200 was sold to a customer for $9,200 on December 31, 2017, but it was recorded as a sale on January 2, 2018. The merchandise was properly excluded from the 2017 ending inventory. Assume the periodic inventory system is used.
(2.) A machine with a five-year life was purchased on January 1, 2017. The machine cost $22,000 and has no expected salvage value. No depreciation was taken in 2017 or 2018. Assume the straight-line method for depreciation.

Required:
Prepare appropriate journal entries (assume the 2018 books have not been closed). Ignore income taxes.

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