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Powell company had the following errors over the last two years: 2015: Ending inventory was overstated by $30,000. 2016: Ending inventory was understated by $5000.

Powell company had the following errors over the last two years: 2015: Ending inventory was overstated by $30,000. 2016: Ending inventory was understated by $5000. Prepare the entry to correct the January 1, 2015 Retained Earning (assume both 2015 and 2016 books have been closed).

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