Tack, Inc., reported a Retained earnings balance of $150,000 at December 31, 2016. In June 2017, Tack's

Question:

Tack, Inc., reported a Retained earnings balance of $150,000 at December 31, 2016. In June 2017, Tack's internal audit staff discovered two errors that were made in preparing the 2016 that are considered material:
a. Merchandise costing $40,000 was mistakenly omitted from the 2016 .
b. Equipment purchased on July 1, 2016, for $70,000 was mistakenly charged to a repairs expense account. The equipment should have been capitalized and depreciated using straight-line depreciation, a 10-year useful life, and $10,000 .
Required:
1. Prepare the journal entry Tack would make in 2017 to correct the errors made in 2016. Assume depreciation for 2017 is made as a year-end adjusting entry. (Ignore taxes.)
2. Describe the content of the comparative periods in Bettner's 2017 That is, how is the correction reflected in the 2017 financial report?
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