Below are four independent, material and unrelated situations involving accounting changes. Each change occurs during 2020 before any adjusting or closing entries were prepared. Assume a tax rate of 40% and any tax effects are adjusted through the deferred tax asset or liability account.

Discuss and evaluate the type of accounting change, briefly describe any steps that should be taken to appropriately report the situation and complete journal entries to

Louis Inc. introduced a new line of auto covers in 2019 that carry a one-year warranty against manufacturers defects. Based on industry experience, warranty costs are expected to approximate 4% of sales. Sales of the covers in 2019 were $1,500,000. Warranty expense and warranty liability of $60,000 was recorded in 2019. In late 2020, the companys claims experience was evaluated, and it was determined that claims were far fewer than expected and 3% rather than 4% was recommended. Sales of the covers in 2020 amounted to $3,200,000 and warranty expenditures in 2020 totaled $72,000. document the change.