Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2018, the company decided to switch to the average cost method. Data for 2018 are as follows:

Beginning inventory, FIFO (5,600 units @ $26)				$	145,600
Purchases:
5,600 units @ $32	$	179,200
5,600 units @ $36		201,600			380,800
Cost of goods available for sale				$	526,400
Sales for 2018 (10,000 units @ $75)				$	750,000

Additional Information:

1. The company's effective income tax rate is 40% for all years.
2. If the company had used the average cost method prior to 2018, ending inventory for 2017 would have been $140,000.
3. 6,800 units remained in inventory at the end of 2018.

Required: 1. Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the average cost method. 2. What is the effect of the change in methods on 2018 net income?