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5 During 2018, WMC Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts: 2016 2017 understated by overstated by $124,000 158,000 Skipped 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. Complete this question by entering your answers in the tabs below. Req 1A 1B Reg 2 Determine the effect of 2016 errors on retained earnings at January 1, 2018, before any adjustments. (Ignore income (If the answers is no effect then select "No effect" in the dropdown.) 2016 2016 effect on 2017 Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold Beginning inventory Plus: net purchases Less: ending inventory Cost of goods sold Revenues Less: cost of goods sold Less: other expenses Revenues Less: cost of goods sold Less: other expenses Net income Net income Retained earnings Retained earnings Req 1A Reg 1B Reg 2 Determine the effect of 2017 errors on retained earnings at January 1, 2018, before any adjustments. (Ignore income (If the answers is no effect then select "No effect" in the dropdown.) 2017 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 Journal entry worksheet 1 Record correction of error. Note: Enter debits before credits