Saved Problem 20-14 (Algo) Errors; change in estimate; change in principle; restatement of previous financial statements [LO20-1, 20-3, 20-4, 20-6] 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): 2019 2020 Assets $780 860 Liabilities $350 420 Shareholders' Equity $430 440 Net Income $230 250 Expenses $154 179 in 2021, 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: 2019 Inventory 2020 inventory Overstated by Understated by $12.4 million $10.4 million b. Alability was accrued in 2019 for a probable payment of $78 million in connection with a lawsuit ultimately settled in December 2021 for $4.4 million c A patent costing $20.4 million at the beginning of 2019. expected to benefit operations for a total of six years, has not been amortized since acquired d. Whaley's 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 $36.0 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 stralght-line depreciation.