Question: (L03) (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;

(L03) (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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