In 2020, Eagle Corp. , a public company, has provided the following information: Sales for 2019 included
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Question:
In 2020, Eagle Corp. , a public company, has provided the following information:
- Sales for 2019 included $16,500 that had been received in cash during 2019, but for which the related products were delivered in 2020. Title did not pass to the purchaser until 2020.
- Ending inventory on December 31, 2019, was understated by $5,640. The December 31, 2020 ending inventory has not been adjusted to the Inventory account. Assume that Eagle has a periodic inventory system, and that no adjustment has been made to the opening balance of the Inventory account.
- In the past, Eagle recognized bad debt expense equal to 2% of sales. After careful review, it has been decided that 1.5% is more appropriate for 2020. Eagle would have reported $19,800 of bad debt expense under the old rate of 2% for 2020. No entry has yet been made in 2020 for bad debt expense.
Required:
Prepare the journal entry(ies) that Eagle needs to make to correct or adjust the accounts, assuming that the accounts for 2020 have not yet been closed. Ignore income tax.
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