During 2018, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

2016 understated by $120,000

2017 overstated by $150,000

WMC uses the periodic inventory system and the FIFO cost method. Assume no error was corrected in 2016 or 2017. Prepare all necessary entries (or an entry) in 2018.