Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2014 and 2015, reported the following amounts and subtotals ($ in millions):

	Assets			Liabilities			Shareholders' Equity			Net Income			Expenses
2014	$	740		$	330		$	410		$	210		$	150
2015		820			400			420			230			175

In 2016 the following situations occurred or came to light:

a.	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:

2014 inventory	Overstated by	$	12	million
2015 inventory	Understated by	$	10	million

b.	A liability was accrued in 2014 for a probable payment of $7 million in connection with a lawsuit ultimately settled in December 2016 for $4 million.
c.	A patent costing $18 million at the beginning of 2014, expected to benefit operations for a total of six years, has not been amortized since acquired.
d.	Whaleys conveyer equipment was depreciated by the sum-of-the-years-digits (SYD) basis since it was acquired at the beginning of 2014 at a cost of $30 million. It has an expected useful life of five years and no expected residual value. At the beginning of 2016, Whaley decided to switch to straight-line depreciation.

Required:

For each situation:

1.

Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2016 related to the situation described. (Ignore tax effects.) (Enter your answers in millions. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Determine the amounts to be reported for each of the five items shown above from the 2014 and 2015 financial statements when those amounts are reported again in the 20142016 comparative financial statements. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions.)

	Asset	Liability	Shareholders' Equity	Net Income	Expenses
2014
2014 Inventory
Loss Contingency
Patent Amortization
Depreciation
2015
2014 Inventory
2015 Inventory
Loss Contingency
Patent Amortization
Depreciation