10 2019 2020 understated by overstated by $120,000 150,000 7 WMC uses the periodic inventory system and the FIFO cost method. points 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? eBook Print Complete this question by entering your answers in the tabs below. References Req 1A Reg 1B Reg 2 Reg 3 Determine 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.) 2019 Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold 2019 effect on 2021 Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold Revenues Less: cost of goods sold Less: other expenses Net income Revenues Less: cost of goods sold Less: other expenses Net income Retained earnings Retained earnings 10 2019 2020 understated by overstated by $120,000 150,000 7 WMC uses the periodic inventory system and the FIFO cost method. points 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? eBook Print Complete this question by entering your answers in the tabs below. References Req 1A Reg 1B Reg 2 Reg 3 Determine 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.) 2019 Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold 2019 effect on 2021 Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold Revenues Less: cost of goods sold Less: other expenses Net income Revenues Less: cost of goods sold Less: other expenses Net income Retained earnings Retained earnings