Prepare the appropriate journal entry


Problem:

The auditor of Mikel's Shops obtained the following information when performing cut off testing procedures during their observation of Mikel's physical inventory count at December 31, 2009.

Bill of Lading number     1235         1236         1237       1238
Date                         12/31/09    12/31/09    1/2/10      1/2/10
Sales Price                 $12,000      $4,500     $18,000    $16,000
Cost of Goods              $9,000      $3,000     $12,000    $12,000

When comparing the cut-off information to the sales records, the auditors found that all there shipments were recorded as 2009 sales. The good shipped on bill of lading 1235 and 1236 were not counted in the inventory, but good of bill of lading 1236 and higher were included.

Required: Prepare the appropriate journal entry to correct the cut-off error.

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Accounting Basics: Prepare the appropriate journal entry
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