Cougar Corp utilizes a periodic inventory system. Below is the information that was reported on Cougar Corps 2016 and 2017 Income Statements.

During January of 2018, you discover an error in Cougar Corps inventory records. Specifically, while an ending inventory count in 2016 revealed ending inventory of $50,000, Cougar Corps accountants mistakenly used $45,000 as their ending inventory in 2016 (beginning inventory in 2017). Assume this is the only mistake made.

	2016		2017
Revenues	200,000		200,000
COGS
Beginning Inventory	40,000		45,000
Inventory Purchases	50,000		50,000
COGAS	90,000		95,000
Less: Ending Inventory	(45,000)		(40,000)
COGS	45,000		55,000
Gross Profit	155,000		145,000
Admin & Selling expenses	(40,000)		(35,000)
Net Income	115,000		110,000

You are tasked with making a retrospective adjustment to Cougar Corps financial statements. Therefore, you must determine what net income should have been in 2016 and 2017 if no mistake was made.

If no mistake was made, Cougar Corps net income for 2016 would have been ________________ and net income for 2017 would have been __________________.

Once Cougar Corps financial statements have been retrospectively adjusted to reflect the correct net income for 2016 and 2017, would Cougar Corp have to make an adjustment to the beginning balance of retained earnings for 2018?

Circle: Yes or No

Why or why not? Briefly explain.