Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2016 and 2017, reported the following amounts and subtotals ($ in millions): Assets Liabilities Shareholders' Equity Net Income Expenses 2016 $ 700 $ 310 $ 390 $ 190 $ 146 2017 780 380 400 210 171 In 2018 the following situations occurred or came to light: Internal auditors discovered that ending inventories reported on the financial statements the two previous years were misstated due to faulty internal controls. The errors were in the following amounts: 2016 inventory Overstated by $ 11.6 million 2017 inventory Understated by $ 9.6 million A liability was accrued in 2016 for a probable payment of $6.2 million in connection with a lawsuit ultimately settled in December 2018 for $3.6 million. A patent costing $15.6 million at the beginning of 2016, expected to benefit operations for a total of six years, has not been amortized since acquired. Whaleys conveyer equipment was depreciated by the sum-of-the-years-digits (SYD) basis since it was acquired at the beginning of 2016 at a cost of $24.0 million. It has an expected useful life of five years and no expected residual value. At the beginning of 2018, Whaley decided to switch to straight-line depreciation.

Record entry necessary as a direct result of the change or error correction.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a(1)

• Record adjusting journal entry if needed for 2018.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a(2)

• Record entry necessary as a direct result of the change or error correction.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
b(1)

• Record adjusting journal entry if needed for 2018.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
b(2)

• Record entry necessary as a direct result of the change or error correction.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
c(1)

• Record adjusting journal entry if needed for 2018.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
c(2)

• Record entry necessary as a direct result of the change or error correction.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
d(1)

• Record adjusting journal entry if needed for 2018.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
d(2)