In 2021, the internal auditors of Development Technologies, Inc., discovered that a $4.5 million purchase of merchandise in 2021 was recorded in 2020 instead. The physical inventory count at the end of 2020 was correct. Assume the company uses a periodic inventory system. Required: Prepare the journal entry needed in 2021 to correct the error. (ignore income taxes.) (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event General Journal Credit Debit 4,500,000,000 1 Purchases 4,500,000,000 Retained earnings

In January 2020, Susquehanna Inc. requested and secured permission from the commissioner of the Internal Revenue Service to compute inventories under the last-in, first-out (LIFO) method and elected to determine inventory cost under the dollar- value LIFO method. Susquehanna Inc. satisfied the commissioner that cost could be accurately determined by use of an index number computed from a representative sample selected from the company's single inventory pool. Instructions a.    Why should inventories be included in (1) a balance sheet and (2) the computation of net income? b.    The Internal Revenue Code allows some accountable events to be considered differently for income tax reporting purposes and financial accounting purposes, while other accountable events must be reported the same for both purposes. Discuss why it might be desirable to report some accountable events differently for financial accounting purposes than for income tax reporting purposes. c.    Discuss the ways and…

Patel Bros. Grocery store recently completed their 2020 Inventory and realized that a truckload of merchandise that is valued at $18,000 was included in inventory, however this merchandise had yet to be received and was sold FOB destination. (a) What is the effect on 2020 Financial Statements including amounts (b) the effects on the 2021 financial statements including amounts; assume no errors are made in 2021.

Vai

You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2024, you discover the following errors related to the 2022 and 2023 financial statements: a. Inventory at 12/31/2022 was understated by $6,400. b. Inventory at 12/31/2023 was overstated by $9,800. c. On 12/31/2023, inventory was purchased for $3,400. The company did not record the purchase until the inventory was paid for early in 2024. At that time, the purchase was recorded by a debit to purchases and a credit to cash. The company uses a periodic inventory system. Required: 1. Assuming that the errors were discovered after the 2023 financial statements were issued, analyze the effect of the errors on 2023 and 2022 cost of goods sold, net income, and retained earnings. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.

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