In 2024, the controller of Sytec Corporation discovered that $56,000 of inventory purchases were incorrectly charged to advertising expense in 2023. In addition, the 2023 year-end inventory count failed to include $37,000 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:

Determine the effect of the errors on retained earnings at January 1, 2024. (Ignore income taxes.)

Prepare a journal entry to correct the errors.