Question - The reported net incomes for the first 2 years of Sheridan Products, Inc., were as follows: 2017, $148,400; 2018, $172,000. Early in 2019, the following errors were discovered.
1. Depreciation of equipment for 2017 was overstated $17,400.
2. Depreciation of equipment for 2018 was understated $42,100.
3. December 31, 2017, inventory was understated $54,700.
4. December 31, 2018, inventory was overstated $16,000.
Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)