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

2016	understated by	$	148,000
2017	overstated by		206,000

WMC uses the periodic inventory system and the FIFO cost method. Required: 1-a. Determine the effect of 2016 errors on retained earnings at January 1, 2018, before any adjustments. (Ignore income taxes.) 1-b. Determine the effect of 2017 errors on retained earnings at January 1, 2018, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the error made in 2017.