3 Exercise 20-7 Change in principle; Change in inventory cost method [LO20-2] Mlington Materials is a leading supplier of building equipment, building products materials&timber for sale, with over 200 branches across the Mid-South. On January 1, 2016, management decided to change from the LIFO inventory costing method to the FIFO memory cosing method at each of outlets. The falowing table presents information concerning the change. The income lax rate al years 40%. Income before Income Tax Difference $7 million 8 million 1 million FIFO LIFO $ 20 million $13 milion Before 2015 2015 2016 18 million 15 million 10 milion 14 milion Required: 1. Prepare the jounal entry to record the change in accounting principle. (All tax eflects should be reflected in the deferred tax liability account.) If no entry is required for a transactionlevent, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e, 5,500,000 should be entered as 5.5 No Event Debit Credit Retained earnings 2. Determine the net income to be reported in the 2016-2015 comparaltive income statements. (Enter your answers in millions rounded to 1 decimal place e 5,500,000 should be entered as 5.5 in Net Income