Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the year ended December 31, 2011, reported the following amounts and subtotals ($ in millions):

In 2012 the following situations occurred or came to light:
a. Internal auditors discovered that ending inventories reported in the financial statements the two previous years were misstated due to faulty internal controls. The errors were in the following amounts:

b. A patent costing $18 million at the beginning of 2010, expected to benefit operations for a total of six years, has not been amortized since acquired.
c. Whaley's conveyer equipment has been depreciated by the sum-of-the-years'-digits (SYD) method since constructed at the beginning of 2010 at a cost of $30 million. It has an expected useful life of five years and no expected residual value. At the beginning of 2012, 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 2012 related to the situation described. (Ignore tax effects.)
2. Determine the amounts to be reported for each of the items shown above from the 2010 and 2011 financial statements when those amounts are reported again in the 2012, 2011, and 2010 comparative financialstatements.

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Shareholders Assets Liabiities Equity 2010 $640 $330 $310 2011 $820 $400 420 Net Income Expenses $210$150 $230 $175 2010 int/01liory (ARrstated in, $12 million