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

2019	understated by	$	124,000
2020	overstated by		154,000

WMC uses a periodic inventory system and the FIFO cost method. Required: 1. Determine the effect of these errors on retained earnings at January 1, 2021, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the errors.