During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by

Question:

During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

WMC uses the 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 error in 2021.3. Will WMC account for the error (a) retrospectively or (b) prospectively?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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