You are the controller of a rapidly growing mass merchandiser. The company uses a periodic inventory system. As the company has grown and accounting systems have developed, errors have occurred in both the physical count of inventory and the valuation of inventory on the balance sheet. You have been able to identify the following errors as of December 2010:
In 2008, one of the retail sections was omitted from the physical count of inventory. The error resulted in inventory being understated on December 31, 2008, by approximately $28,700.
In 2008, one section of the warehouse was counted twice. The error resulted in inventory being overstated on December 31, 2008, by approximately $45,600.
In 2009, the replacement cost of some inventory was less than the FIFO value used ?c on the balance sheet. The inventory would have been $6,000 less on the balance sheet dated December 31, 2009.
What, if anything, should you do to correct each of these errors? Explain your answers.