During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

$```$

$2022$

$2023$

understated by

$ $156,000$

overstated by

$222,000$

$```$

Lipe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

$1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

$2.$ Prepare a journal entry to correct the error in $2024.$

$3.$ Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Req $1$A

Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

Note: If the answers is no effect then select $"$No effect" in the dropdown. During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financial statements were misstated by the following amounts:

$```$

$2022$

$2023$

understated by

$ $156,000$

overstated by

$222,000$

$```$

Lipe and Lipe uses the periodic Inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retalned earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

$2.$ Prepare a journal entry to correct the error in $2024.$

$3.$ Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

Note: If the answers is no effect then select $"$No effect" in the dropdown. During $2024,$ Lipe and Lipe Corporation discovered that its ending inventories reported on its financlal statements were misstated by the following amounts:

Lipe and Lipe uses the periodic inventory system and the FIFO cost method.

Required:

$1-$a$.$ Determine the effect of $2022$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore Income taxes.$)1-$b$.$ Determine the effect of $2023$ errors on retained earnings at January $1,2024,$ before any adjustments. $($Ignore income taxes.$)$

$2.$ Prepare a journal entry to correct the error in $2024.$

$3.$ Will Lipe and Lipe account for the error $($a$)$ retrospectively or $($b$)$ prospectively?

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Prepare a journal entry to correct the error in $2024.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.