In 2017, the Emerson, Inc. changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2016, Emerson's inventories were $96,000 (FIFO). Emerson's records indicated that the inventories would have totaled $71,400 at December 31, 2016, if determined on an average cost basis.

Required:

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

2. Briefly describe other steps Emerson should take to report the change.