Internal auditors for Rockford Products discovered in early 2011 these errors and ommissions in their review of the 2010 financial records. A material liability for salaries of 13,000 at December 31,2010, was not recorded. The salaries were changed to salary expense when paid.
Equipment costing 5,500 was purchased without first securing a competitive bid, in violation of company policy. Prior years depreciation expense was materially understated by 13,500 due to a computation error.Prepare any necessary journal entries required ass a result of the findings of the internal auditors. Ignore income tax effects.