In 2011, the Carney Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 2010, Carney's inventories were $32 million (FIFO). Carney's records indicated that the inventories would have totaled $23.8 million at December 31, 2010, if determined on an average cost basis. Ignoring income taxes, what journal entry will Carney use to record the adjustment in 2011? Briefly describe other steps Carney should take to report the change.
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