In 2013, the controller of Sytec Corporation discovered that $64,000 of inventory purchases were incorrectly charged to advertising expense in 2012. In addition, the 2012 year-end inventory count failed to include $41,000 of company merchandise held on consignment by Erin Brothers. Sytec uses a periodic inventory system. Other than the omission of the merchandise on consignment, the year-end inventory count was correct. The amounts of the errors are deemed to be material.

Required:
1.	Determine the effect of the errors on retained earnings at January 1, 2013. (Ignore income taxes.)
	Retained earnings would be ________________ by _______________.

2.

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