Exercise 20-19 (Algo) Error correction; inventory error [LO20-6] 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 overstated by $ 136,000 182,000 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 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. 2022 Beginning inventory 2022 effect on 2024 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 Plus: net purchases Less: ending inventory Cost of goods sold Revenues Less: cost of goods sold Less: other expenses Net income Retained earnings