During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts 2019 understated by $ 146,000 2020 overstated by 202,000 WMC uses the periodic inventory system and the FIFO cost method Required 1 a Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments (Ignore income taxes ) 1 b Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments (Ignore income taxes ) 2 Prepare a journal entry to correct the error in 2021 3 Will WMC account for the error (a) retrospectively or (b) prospectively Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2 Req 3 Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments (Ignore income taxes ) (If the answers is no effect then select No effect in the dropdown ) 2019 2019 effect on 2021 Beginning inventory Beginning inventory Plus net purchases Plus net purchases Less ending inventory Less ending inventory Cost of goods sold Cost of goods sold Revenues Revenues Less cost of goods sold Less cost of goods sold Less other expenses Less other expenses Net income Net income Retained earnings Retained earnings Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments (Ignore income taxes ) (If the answers is no effect then select No effect in the dropdown ) 2020 Beginning inventory Plus net purchases Less ending inventory Cost of goods sold Revenues Less cost of goods sold Less other expenses Net income Retained earnings Prepare a journal entry to correct the error in 2021 (If no entry is required for a transaction event, select No journal entry required in the first account field ) Journal entry worksheet Note Enter debits before credits Event General Journal Debit Credit 1 Will WMC account for the error (a) retrospectively or (b) prospectively WMC account for the error

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During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2019 understated by $ 146,000

During 2021, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:


2019	understated by	$	146,000
2020	overstated by		202,000

WMC uses the periodic inventory system and the FIFO cost method. Required: 1-a. Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 1-b. Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the error in 2021. 3. Will WMC account for the error (a) retrospectively or (b) prospectively?

Complete this question by entering your answers in the tabs below.

Req 1A
Req 1B
Req 2
Req 3

Determine the effect of 2019 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) (If the answers is no effect then select "No effect" in the dropdown.)

2019		2019 effect on 2021
Beginning inventory		Beginning inventory
Plus: net purchases		Plus: net purchases
Less: ending inventory		Less: ending inventory
Cost of goods sold		Cost of goods sold

Revenues		Revenues
Less: cost of goods sold		Less: cost of goods sold
Less: other expenses		Less: other expenses
Net income		Net income

Retained earnings		Retained earnings

Determine the effect of 2020 errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) (If the answers is no effect then select "No effect" in the dropdown.)

2020
Beginning inventory
Plus: net purchases
Less: ending inventory
Cost of goods sold

Revenues
Less: cost of goods sold
Less: other expenses
Net income

Retained earnings

Prepare a journal entry to correct the error in 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Note: Enter debits before credits.