As Merrilee Fashions was preparing its $2022$ financial statements, it discovered an error in its $2019$ financial statements: Merrilee had not recorded a $$50,000$ sale on both its books and tax returns. As a result, the firm understated sales and accounts receivable in $2019.$ Merrilee never collected the receivable but is seeking payment from the customer. Merrilee has a constant tax rate of $40\%$ and reports $3$ years of comparative income statements and $2$ years of comparative balance sheets with its financial reports. What is the necessary journal entry to record the prior$-$period adjustment, and how shouf Merrilee report its accounts receivable and retained earnings balances in these financial statements?

Prepare the journal entry to record the prior$-$period adjustment on December $31,2022.($Record debits first, then credits. Exclude explanations from any journal entries.$)$

$\backslash$table$[[$Account$,$December $31,2022,],[,,],[,,],[,,]]$

Determine how Merrilee should report its accounts receivable and retained earnings balances in the financial statements.

These adjustments will be closing balances on the December comparative statements. reported in the $31,2021$ Thus, the balances in retained earnings and accounts will increase receivable on by and respectively.