In the Year 2009, the Internal Auditors of Blooper Inc

question 55

Essay

In the year 2009, the internal auditors of Blooper Inc. discovered that goods costing $12 million that were shipped f.o.b. shipping point in December of 2008 were in transit on 12/31/08. The goods were recorded as a purchase in December of 2008 but were not included in the 2008 year-end inventory.
Required:
Prepare the journal entry needed in 2009 to correct the error. Also, briefly describe any other measures Blooper would take in connection with correcting the error. (Ignore income taxes.)
Analysis:

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Definitions:

Baskets

Containers typically made of woven strands of material used for storing or carrying items; metaphorically, it refers to groups or collections of items.

Domestically

Pertaining to or within a specific country's borders, often in contrast to international or foreign.

Trade

The act of buying, selling, or exchanging goods and services between parties within an economy or between economies.

Imports

Goods or services brought into a country from abroad for sale.