Lindy Company's Auditor Discovered Two Errors

question 104

Essay

Lindy Company's auditor discovered two errors.No errors were corrected during 2015.The errors are described as follows:
(1. )Merchandise costing $4,000 was sold to a customer for $9,000 on December 31,2015,but it was recorded as a sale on January 2,2016.The merchandise was properly excluded from the 2015 ending inventory.Assume the periodic inventory system is used.
(2. )A machine with a five-year life was purchased on January 1,2015.The machine cost $20,000 and has no expected salvage value.No depreciation was taken in 2015 or 2016.Assume the straight-line method for depreciation.
Required:
Prepare appropriate journal entries (assume the 2016 books have not been closed).Ignore income taxes.

Recognize the role and enforceability of fairness in contracts.

Comprehend the legal process and consequences of offer and acceptance in contract formation.

Define and explain the concept of consideration in contract law.

Identify the significance and application of promissory estoppel.

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Definitions:

Labor Force Participation Rate

The labor force as a percentage of the adult population.

Adult Population

The adult population consists of all individuals in a certain region or country who are considered adults, typically based on achieving a specific legal age of majority.

Looking for Work

The activity of actively seeking employment or trying to find a job.

Frictional Unemployment

Short-term unemployment occurring when people are between jobs or entering the workforce for the first time.