Millington 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, 2018, management decided to change from the average inventory costing method to the FIFO inventory costing method at each of its outlets. The following table presents information concerning the change. The income tax rate for all years is 40%.

Income before Income Tax FIFO Average Cost Difference Before 2017 $ 15 million $ 8 million $ 7 million 2017 8 million 5 million 3 million 2018 10 million 9 million 1 million Required: 1. Prepare the journal entry to record the change in accounting principle. 2. Determine the net income to be reported in the 20182017 comparative income statements. 4. Indicate the affect of the change in the 20182017 comparative statements of shareholders equity. Cash dividends were $1 million each year. Assume no dividends were paid prior to 2017.

Please solve it with explanation, and no handwriting