Lindy Company's Auditor Discovered Two Errors

question 104

Essay

Lindy Company's auditor discovered two errors. No errors were corrected during 2012. The errors are described as follows:
(1.) Merchandise costing $4,000 was sold to a customer for $9,000 on December 31, 2012, but it was recorded as a sale on January 2, 2013. The merchandise was properly excluded from the 2012 ending inventory. Assume the periodic inventory system is used.
(2.) A machine with a five-year life was purchased on January 1, 2012. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2012 or 2013. Assume the straight-line method for depreciation.
Required:
Prepare appropriate journal entries (assume the 2013 books have not been closed). Ignore income taxes.

---

Definitions:

Ego Control

A psychological concept referring to an individual's ability to regulate their impulses, emotions, and behaviors in accordance with societal norms.

Emotional Underdevelopment

Refers to a lack of emotional maturity, characterized by an inability to manage emotions or maintain healthy emotional relationships.

Romanian Orphans

Refers to the children institutionalized in harsh conditions in Romania during the late 20th century, whose plight highlighted issues of child welfare and human rights.

Intellectual Underdevelopment

A situation or condition where an individual or community does not achieve cognitive growth or intellectual progress expected for their age or environment.