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Exercise 20-19 (Algo) Error correction; inventory error (LO20-6) During 2021. WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2019 understated by 2020 overstated by $126,000 162,000 WMC uses the periodic Inventory system and the FIFO cost method. Required: 1-o. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments (Ignore income taxes.) 1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments (ignore income taxes) 2. Prepare a journal entry to correct the error in 2021. 3. Wil WMC account for the error (a) retrospectively or (b) prospectively? Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req2 Reg 3 Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (1hore income taxes.) (If the answers is no effect then select "No effect in the dropdown) 2019 2019 effect on 2021 Beginning inventory Beginning inventory Plus: not purchases Plus net purchases Less ending inventory Less ending inventory Cost of goods sold Cost of goods sold Revenues Less: cost of goods sold Less other expenses Not income Revenues Less cost of goods sold Less other expenses Not income Retained earings Retained earnings

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