During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts:
2019 understated by $138,000
2020 overstated by 168,000
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. (lgnore income taxes)
2. Prepare a journal entry to correct the errors.
Answers: 1
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During 2021, WMC Corporation discovered that its ending inventories reported in its financial statem...
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