In the Year 2018, the Internal Auditors of Goofy Co

question 58

Essay

In the year 2018, the internal auditors of Goofy Co. discovered that goods costing $25 million that were purchased in December of 2017 were recorded for $20 million. The goods were properly measured in the December 31, 2017, ending physical inventory.
Required:
Prepare the journal entry needed in 2018 to correct the error. Also, briefly describe any other measures Goofy would take in connection with correcting the error. (Ignore income taxes.)

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Definitions:

Bounded Rationality

A concept suggesting that individuals make decisions based on limited information, limited time, and their own limited cognitive processing capacity.

Biopsychologist

An expert in the field of biopsychology, analyzing how the brain, neurons, and nervous system influence thoughts, behaviors, and emotions.

Unconscious Thoughts

Relates to ideas, memories, and desires that are outside of conscious awareness but can influence behavior and emotions.

Brain Damage

Physical harm to the brain that can result from injury, illnesses, or conditions, often leading to temporary or permanent impairment of cognitive, physical, and psychological functions.