Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1976. In 2013, the company decided to switch to the average cost method. Data for 2013 are as follows:

Beginning inventory, FIFO (5,300 units @ $32)				$	169,600
Purchases:
5,300 units @ $38	$	201,400
5,300 units @ $42		222,600			424,000
Cost of goods available for sale				$	593,600
Sales for 2013 (8,000 units @ $70)				$	560,000

Additional Information:

a.	The company's effective income tax rate is 40% for all years.
b.	If the company had used the average cost method prior to 2013, ending inventory for 2012 would have been $132,500.
c.	7,900 units remained in inventory at the end of 2013.

Required:

1.	Prepare the 2013 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for an event, select "No journal entry required" in the first account field.)

2.	What is the effect of the change in methods on 2013 net income?