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	$	810		$	365		$	445		$	245		$	157
2017		890			435			455			265			182

In 2018 the following situations occurred or came to light:

1. 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	$	12.7	million
2017 inventory	Understated by	$	10.7	million

2. A liability was accrued in 2016 for a probable payment of $8.4 million in connection with a lawsuit ultimately settled in December 2018 for $4.7 million.
3. A patent costing $22.2 million at the beginning of 2016, expected to benefit operations for a total of six years, has not been amortized since acquired.
4. 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 $40.5 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.

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 2018 related to the situation described. (Ignore tax effects.) 2. Determine the amounts to be reported for each of the five items shown below from the 2016 and 2017 financial statements when those amounts are reported again in the 20162018 comparative financial statements.