4. The company has failed to accrue sales commissions payable at the end of ea

4. The company has failed to accrue sales commissions payable at the end of each of the last 2 years as follows.

December 31 2011

$ 5400

December 31 2012

$ 4600

5. In reviewing the December 31 2011 inventory the company discovered errors in its inventory-taking procedures that have
caused inventories for the last 3 years to be incorrect as follows. The company has already made an entry that established the incorrect
December 31 2012 inventory amount.

December 31 2010

Understated

$ 32000

December 31 2011

Understated

$ 51000

December 31 2012

Overstated

$ 9500

6. At December 31 2012 the company decided to change to the straight -line method depreciation method on its retail display equipment from
double-declining-balance. The equipment had an original cost of $250000 when purchased on January 1 2011. It has a salvage value of 0 and an 8-year useful
life. Depreciation expense recorded prior to 2012 under the double-declining-balance method was $62500. The company has already recorded 2012 depreciation
expense of $46875 using the double-declining-balance method.

7. Before the current year the company accounted for its income from long-term construction contracts on the
completed-contract basis. Early this year the company changed to the percentage-of-completion basis for accounting purposes but continues to
use the completed-contract method for tax purposes. Income for the current year has been recorded using the new method. Prior year tax effects
must be considered. The following information is available.

Pretax Income

Percentage-of-Completion

Completed-Contract

Prior to 2012

$320000

$180000

2012

$140000

$120000

Required:

Prepare the journal entries necessary at December 31 2012 to record the corrections and changes made to date related to the
information provided. The books are still open for 2012. The income tax rate is 35%. The company has not yet recorded its 2012 income tax
expense and payable amounts so current-year tax effects may be ignored.