During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by overstated by $128,000 158,000 2019 2020 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. Complete this question by entering your answers in the tabs below. Doguirod

During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts: understated by overstated by $128,000 158,000 2019 2020 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. Complete this question by entering your answers in the tabs below. Doguirod

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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During 2021, WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the
following material amounts:
understated by
overstated by
$128,000
158,000
2019
2020
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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)
Retained earnings would be
Required 1
Required 2

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