During 2014, Paul Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2012 2013 $60,000 understated $75,000 understated Paul uses the periodic inventory system. Prior to any adjustments for these errors and ignoring income taxes, Paul's retained earnings at January 1, 2014, would be: Select one: a. Correct b. $15,000 understated c. $75,000 overstated d. $135,000 understated e. $75,000 understated A store uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. Past experience indicates that the average mark up on cost is 30%. The following data relate to the month of March: Inventory cost, March 1 Purchases during the month at cost Sales Sales returns $20,000 77,000 97,500 5,200 Using the data above, what is the estimated ending inventory at March 31? Select one: a. $22,000 b. $28,750 c. $26,000 d. $32,390 e. $32,390