During $2024,$ WMC Corporation discovered that its ending inventories reported in its financial statements were misstated by the following material amounts:

$2022$ understated by $ $133,000$

$2023$ overstated by $163,000$

WMC uses a periodic inventory system and the FIFO cost method.

Required:

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

Prepare a journal entry to correct the errors.

$2023$ overstated by $163,000$

WMC uses a periodic inventory system and the FIFO cost method.