E 9-27 Inventory error. In 2011, the internal auditors of Development Technologies, Inc. discovered that a $4 million
ANSWER KEY E 9-27 Inventory error
In 2011, the internal auditors of Development Technologies, Inc. discovered that a $4 million purchase of merchandise in 2011 was recorded in 2010 instead. The physical inventory count at the end of 2010 was correct.
Required:
Prepare the journal entry needed in 2011 to correct the error. Also, briefly describe any other measures Development Technologies would take in connection with correcting the error. (Ignore income taxes.)
