Question - The reported net incomes for the first 2 years of Sinclair Products, Inc., were as follows: 2010, $147,000; 2011, $185,000. Early in 2012, the following errors were discovered.
1. Depreciation of equipment for 2010 was overstated $19,000.
2. Depreciation of equipment for 2011 was understated $38,500.
3. December 31, 2010, inventory was understated $50,000.
4. December 31, 2011, inventory was overstated $14,200.
Instructions: Prepare the correcting entry necessary when these errors are discovered. Assume that the books for 2011 are closed. (Ignore income tax considerations.)