The reported net incomes for the first 2 years of Sinclair Products, Inc., were as follows: 2021, $147,000; 2022, $185,000. Early in 2023, the following errors were discovered.

1. Depreciation of equipment for 2021 was overstated $19,000.

2. Depreciation of equipment for 2022 was understated $38,500.

3. December 31, 2021, inventory was understated $50,000.

4. December 31, 2022, inventory was overstated $14,200.

Instructions

Prepare the correcting entry necessary when these errors are discovered. Assume that the books for 2022 are closed. (Ignore income tax considerations.)