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
2014 $740 $330 $410 $210 $150
2015 820 400 420 230 175

In 2016 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:

2014 inventory Overstated by $12 million
2015 inventory Understated by $10 million

b. A liability was accrued in 2014 for a probable payment of $7 million in connection with a lawsuit ultimately settled in December 2016 for $4 million.
c. A patent costing $18 million at the beginning of 2014, 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 2014 at a cost of $30 million. It has an expected useful life of five years and no expected residual value. At the beginning of 2016, Whaley decided to switch to straight-line depreciation.

Required:
Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2016 related to the situation described.