Question - The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2014, $144,170; 2015, $181,710. Early in 2016, the following errors were discovered.
1. Depreciation of equipment for 2014 was overstated $11,600.
2. Depreciation of equipment for 2015 was understated $39,160.
3. December 31, 2014, inventory was understated $49,950.
4. December 31, 2015, inventory was overstated $15,840.
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)