(Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2017, $147,000; 2018, $185,000. Early in 2019, the following errors were discovered.1. Depreciation of equipment for 2017 was overstated $17,000.2. Depreciation of equipment for 2018 was understated $38,500.3. December 31, 2017, inventory was understated $50,000.4. December 31, 2018, inventory was overstated $16,200.InstructionsPrepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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(Error Analysis and Correcting Entry) The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2017, $147,000; 2018, $185,000. Early in 2019, the following errors were discovered.
1. Depreciation of equipment for 2017 was overstated $17,000.
2. Depreciation of equipment for 2018 was understated $38,500.
3. December 31, 2017, inventory was understated $50,000.
4. December 31, 2018, inventory was overstated $16,200.
Instructions
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)

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