Lindy Company's Auditor Discovered Two Errors

question 46

Essay

Lindy Company's auditor discovered two errors. No errors were corrected during 2017. The errors are described as follows:
(1.) Merchandise costing $4,000 was sold to a customer for $9,000 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 $20,000 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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Definitions:

Secondary Data

Information collected for alternative purposes prior to the study.

Buying Behavior

The decision-making processes and actions of consumers regarding the search for, selection, purchase, use, and disposal of goods and services.

Marketing Research Process

A systematic methodology for gathering, recording, and analyzing data about issues related to marketing products and services.

Focus Groups

A research method that gathers feedback, opinions, or perceptions from a group of people about a product, service, concept, or idea.