In reviewing the books of Bopper Retailers inc., the auditor discovered certain errors that had occured during 2013 and 2014. No errors were corrected during 2013. the errors are summarized below
a. beginning merchandise inventory (january 1, 2013) was understated by 8640
b. merchandise costing 2400 was sold for 4000 to A.J. Taylor on december 29, 2013 but the sale was recorded in 2014. the merchandise was shipped F.O.B. shipping point and was not included in ending inventory. Bopper uses a periodic invetory system.
c. a two-year fire insurance policy was purchased on may 1,2013 for 5760. the entire amount was debited to prepaid insurance. no adjusting entry was made in 2013 or 2014
d. a one year note receivable of 9600 was held by bopper beginning october 1, 2013. payment of the 10 percent note and accrued interest was received upon maturity. no adjusting entry was made on december 31, 2013.
e. equipment with a ten year life was purchased on january 1, 2013, for 39200. no depreciation expense was recorded during 2013 or 2014. assume that the equipment has no salvage value and the bopper uses the straight line method for recording depreciation
prepare journal entries to correct each of these independent situations. assume that the nominal accounts for 2014 have not yet been closed into the income summary account.