Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2019 and 2020, reported the following amounts and subtotals ($ in millions):

	Assets			Liabilities			Shareholders' Equity			Net Income			Expenses
2019	$	740		$	330		$	410		$	210		$	150
2020		820			400			420			230			175

In 2021, 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:

2019 inventory	Overstated by	$	12	million
2020 inventory	Understated by	$	10	million

1. A liability was accrued in 2019 for a probable payment of $7 million in connection with a lawsuit ultimately settled in December 2021 for $4 million.
2. A patent costing $18 million at the beginning of 2019, expected to benefit operations for a total of six years, has not been amortized since acquired.
3. Whaleys conveyer equipment was depreciated by the sum-of-the-years-digits (SYD) basis since it was acquired at the beginning of 2019 at a cost of $30 million. It has an expected useful life of five years and no expected residual value. At the beginning of 2021, 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 2021 related to the situation described. (Ignore tax effects.) 2. Determine the amounts to be reported for each of the five items shown above from the 2019 and 2020 financial statements when those amounts are reported again in the 20192021 comparative financial statements.