During 2016, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

2014	understated by	$	158,000
2015	overstated by		226,000

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

Required:

1-a.	Determine the effect of 2014 error on retained earnings at January 1, 2016, before any adjustments. (Ignore income taxes.)

1-b.	Determine the effect of 2015 error on retained earnings at January 1, 2016, before any adjustments. (Ignore income taxes.)

2.	Prepare a journal entry to correct the error made in 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)