Platinum Co. failed to record $72,000 credit purchase of goods that were received on the last day of its fiscal year end. However, it included these goods in the ending inventory. Platinum found this error three months later when the supplier contacted it for payment. If Platinum uses the periodic inventory system, which journal entry should it make to correct this error? Debit Inventory $72,000 and credit Retained Earnings $72,000. Debit Retained Earnings $72,000 and credit Accounts payable $72,000. Debit Retained Earnings $72,000 and credit Inventory $72,000. Debit Inventory $72,000 and credit Accounts Payable $72,000.
Platinum Co. failed to record $72,000 credit purchase of goods that were received on the last day of its fiscal year end. However, it included these goods in the ending inventory. Platinum found this error three months later when the supplier contacted it for payment. If Platinum uses the periodic inventory system, which journal entry should it make to correct this error? Debit Inventory $72,000 and credit Retained Earnings $72,000. Debit Retained Earnings $72,000 and credit Accounts payable $72,000. Debit Retained Earnings $72,000 and credit Inventory $72,000. Debit Inventory $72,000 and credit Accounts Payable $72,000.
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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Platinum Co. failed to record $72,000 credit purchase of goods that were received on the last day of its fiscal year end. However, it included these goods in the ending inventory. Platinum found this error three months later when the supplier contacted it for payment. If Platinum uses the periodic inventory system, which
Debit Inventory $72,000 and credit Retained Earnings $72,000.
Debit Retained Earnings $72,000 and credit Accounts payable $72,000.
Debit Retained Earnings $72,000 and credit Inventory $72,000.
Debit Inventory $72,000 and credit Accounts Payable $72,000.
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