In reviewing the books of Meyers Retailers Inc., the auditor discovered certain errors that had occurred during 2010 and 2011. No errors were corrected during 2010. The errors are summarized below:

(a) Beginning merchandise inventory (January 1, 2010) was understated by $8,640.

(b) Merchandise costing $2,400 was sold for $4,000 to B.J. Taylor on December 29, 2010, but the sale was recorded in 2011. The merchandise was shipped F.O.B. shipping point and was not included in ending inventory. Meyers uses a periodic inventory system.

(c) A two-year fire insurance policy was purchased on May 1, 2010, for $5,760. The entire amount was debited to Prepaid Insurance. No adjusting entry was made in 2010 or 2011.

(d) A one-year note receivable of $9,600 was held by Meyers beginning October 1, 2010. Payment of the 10 percent note and accrued interest was received upon maturity. No adjusting entry was made on December 31, 2010.

(e) Equipment with a ten-year life was purchased on January 1, 2010, for $39,200. No depreciation expense was recorded during 2010 or 2011. Assume that the equipment has no salvage value and that Meyers uses the straight-line method for recording depreciation.