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.

Determine the effect of these errors on retained earnings at

January 1, 2018, before any adjustments. (Ignore income

taxes.)

Prepare journal entry to correct the error.

What other step(s) would be taken in connection with the

error?