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In the Year 2013, the Internal Auditors of Goofy Co

question 45

Essay

In the year 2013, the internal auditors of Goofy Co. discovered that goods costing $25 million that were purchased in December of 2012 were recorded for $20 million. The goods were properly measured in the December 31, 2012, ending physical inventory.
Required:
Prepare the journal entry needed in 2013 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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