Additional Information:

The company's effective income tax rate is $25\%$ for all years.

If the company had used the average cost method prior to $2024,$ ending inventory for $2023$ would have been $$130,000.$

$7,000$ units remained in inventory at the end of $2024.$

Required:

Ignoring income taxes, prepare the $2024$ journal entry to adjust the accounts to reflect the average cost method.

What is the effect of the change in methods on $2024$ net income?