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.

Explain the process of reconditioning and how it differs from spontaneous recovery.

Understand the significance of stimulus generalization in the learning process.

Understand the concept of marginal utility and how it influences consumer decision-making.

Interpret the significance of price salience on demand elasticity.

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Definitions:

Traumatic Prenatal

Pre-birth experiences or exposures that are distressing and potentially harmful to development.

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Neurology

A branch of medicine concerned with the study and treatment of disorders of the nervous system.

Mental Patients

Individuals receiving treatment for mental health disorders or conditions, often under the care of healthcare professionals.