During 2018, WMC Corporation discovered that its ending inventories reported in its financial statements were...
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Accounting
During 2018, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts:
2016
understated by
$
130,000
2017
overstated by
160,000
WMC uses a periodic inventory system and the FIFO cost method. Required:1. Determine the effect of these errors on retained earnings at January 1, 2018, before any adjustments. (Ignore income taxes.)
2. Prepare a journal entry to correct the errors.
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