Please let me know if I'm right!!

I made the following errors in counting its year-end physical inventories:
2001 $ 60 overstatement
2002 $108 understatement
2003 $90 overstatement
t I'm thinking the entry to correct the accounts at the end of 2003 is
Retained Earnings $48
Cost of Goods Sold $42
Inventory $90
or should I go with next
Retained Earnings $18
Cost of Goods Sold $72
Inventory $90

To determine the correct entry to correct the accounts at the end of 2003, we need to consider the errors in the year-end physical inventories for each year.

Let's go through the errors:

1. In 2001, there was a $60 overstatement in inventory.
2. In 2002, there was a $108 understatement in inventory.
3. In 2003, there was a $90 overstatement in inventory.

To correct these errors, you need to adjust the appropriate accounts, which are Retained Earnings, Cost of Goods Sold, and Inventory.

To correct for the overstatement and understatement errors, you need to make opposite adjustments. For example, if there was an overstatement in one year, you need to deduct that amount in the correcting entry, and if there was an understatement, you need to add that amount.

Now, let's determine the correct entry at the end of 2003:

1. Inventory had an overstatement of $60 in 2001 and an overstatement of $90 in 2003, totaling $150 overstatement. Thus, you need to deduct $150 from Inventory to correct these errors.

2. The adjustment to Cost of Goods Sold will depend on the timing of the errors. If the errors were discovered and recorded in subsequent years (e.g., the overstatement in 2001 was discovered and recorded in 2003), you would deduct the cumulative amount of errors from Cost of Goods Sold. In this case, the total error is an overstatement of $150, so you would deduct $150 from Cost of Goods Sold.

3. Lastly, the adjustment to Retained Earnings will be the opposite of the adjustment to Cost of Goods Sold. If you deducted $150 from Cost of Goods Sold, you need to add the same amount ($150) to Retained Earnings.

Based on these adjustments, the correct entry at the end of 2003 would be:

Retained Earnings: $150 (debit)
Cost of Goods Sold: $150 (credit)
Inventory: $150 (credit)

This entry reflects the corrections for the inventory errors for the specified years. Therefore, the correct entry would be:

Retained Earnings: $150 (debit)
Cost of Goods Sold: $150 (credit)
Inventory: $150 (credit)