In 2021, Winslow International, Inc.’s controller discovered that ending inventories for 2019 and 2020 were overstated by $290,000 and $590,000, respectively. Determine the effect of the errors on retained earnings at January 1, 2021. (Ignore income taxes.)

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 12RE: Abrat Company failed to accrue an allowance for doubtful accounts of 13,500 in 2019. Upon discovery...
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In 2021, Winslow International, Inc.’s controller discovered that ending inventories for 2019 and 2020 were overstated by $290,000 and $590,000, respectively.

Determine the effect of the errors on retained earnings at January 1, 2021. (Ignore income taxes.)
  

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