Tarleton Company discovered ending inventory errors in 2021 and 2022. The 2021 ending inventory was overstated by $245,000 whereas the 2022 ending inventory was understated by $95,000. Ignoring income tax effects, by what amount should the beginning retained earnings be adjusted on January 1, 2023? Group of answer choices $95,000 debit $95,000 credit $150,000 debit $245,000 credit

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 13EA: If a group of inventory items costing $15,000 had been omitted from the year-end inventory count,...
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Tarleton Company discovered ending inventory errors in 2021 and 2022. The 2021 ending inventory was overstated by $245,000 whereas the 2022 ending inventory was understated by $95,000. Ignoring income tax effects, by what amount should the beginning retained earnings be adjusted on January 1, 2023?
Group of answer choices
$95,000 debit
$95,000 credit
$150,000 debit
$245,000 credit
 
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