Tarleton Company Discovered Ending Inventory Errors in 2017 and 2018

Multiple Choice

Tarleton Company discovered ending inventory errors in 2017 and 2018. The 2017 ending inventory was overstated by $215,000 whereas the 2018 ending inventory was understated by $85,000. Ignoring income tax effects, by what amount should the beginning retained earnings be adjusted on January 1, 2019?

A) $85,000 debit
B) $85,000 credit
C) $130,000 debit
D) $215,000 credit