During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were...
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Accounting
During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts:
| 2019 | understated by | $ | 132,000 | |
| 2020 | overstated by | 162,000 | ||
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, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.
Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)
Prepare a journal entry to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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