During 2021, WMC Corporation discovered that its ending Inventories reported on Its financial statements were misstated by thefollowing amounts:2019 understated by2020 overstated byWMC uses the periodic Inventory system and the FIFO cost method.Required:1-a. 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. Will WMC account for the error (a) retrospectively or (b) prospectively?Complete this question by entering your answers in the tabs below.Req 1AReq 18Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.)(If the answers is no effect then select "No effect" in the dropdown.)2019Beginning inventoryPlus: net purchases$146,000202,000Less: ending inventoryCost of goods soldRevenuesLess: cost of goods soldLess: other expensesNet incomeRetained earningsReq 2Req 32020Beginning inventoryPlus: net purchasesLess: ending inventoryCost of goods soldRevenuesLess: cost of goods soldLess: other expensesNet incomeRetained earnings< Req 1AReq 1B >

The total sum of a company's income that is set aside for reinvestment rather than being paid out as…

During 2021, WMC Corporation discovered that its ending Inventories reported on Its financial statements were misstated by the following amounts: 2019 understated by 2828 overstated by $146,000 202,000 WMC uses the periodic Inventory system and the FIFO cost method. Required: 1-a. 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. Will WMC account for the error (a) retrospectively or (b) prospectively?

During 2021, WMC Corporation discovered that its ending Inventories reported on Its financial statements were misstated by the following amounts: 2019 understated by 2828 overstated by $146,000 202,000 WMC uses the periodic Inventory system and the FIFO cost method. Required: 1-a. 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. Will WMC account for the error (a) retrospectively or (b) prospectively?

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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