In 2016, CPS Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2015, CPS's inventories were $32 million (FIFO). CPS's records indicated that the inventories would have totaled $23.8 million at December 31, 2015, if determined on an average cost basis.

Required:

Prepare the journal entry to record the adjustment. (Ignore income taxes.)

Briefly describe other steps CPS should take to report the change.