During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were missta

the following amounts:understated by

$ $128,000$

$2023$

overstated by

$166,000$Lipe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes

$1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes

Prepare a journal entry to correct the error in $2024.$

Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Complete this question by entering your answers in the tabs below.Note: If the answers is no effect then select $"$No effect" in the dropdown. During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstate

the following amounts:understated by

$ $128,000$

$2023$

overstated by

$166,000$Lipe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retalned earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes.$)$

$1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes.$)$

Prepare a journal entry to correct the error in $2024.$

Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Complete this question by entering your answers in the tabs below.

Prepare a journal entry to correct the error in $2024.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

Record correction of error.

Note: Enter debits before credits. During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by

the following amounts:

LIpe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

$1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

Prepare a journal entry to correct the error in $2024.$

Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Complete this question by entering your answers in the tabs below.

Req $1B$

Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Lipe and Lipe account for the error

the following amounts:$2023$

understated by

$ $128,000$

overstated by

$166,000$Lipe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes.$)$

$1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes.$)$

Prepare a journal entry to correct the error in $2024.$

Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Complete this question by entering your answers in the tabs below.

Req $1A$

Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

Note: If the answers is no effect then select $"$No effect" in the dropdown.