Answer Happy

Lindy Company's auditor discovered two errors. No errors were corrected during 2020. The errors are described as follows: (1) Merchandise costing $3,800 was sold to a customer for $8,800 on December 31, 2020, but it was recorded as a sale on January 2, 2021. The merchandise was properly excluded from the 2020 ending inventory. Assume the periodic inventory system is used. (2) A machine with a five-year life was purchased on January 1, 2020. The machine cost $18,000 and has no expected salvage value. No depreciation was taken in 2020 or 2021. Assume the straight-line method for depreciation. Required: Prepare appropriate journal entries (assume the 2021 books have not been closed). Ignore income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 Transaction 1 2 Sales Answer is complete but not entirely correct. Retained earnings General Journal Depreciation expense Retained earnings Accumulated depreciation › › *** Dobit 8,800✔ 3,600 3,800 > * Credit 8,800✔ 4 7,400 X