complete the journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2024 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refundincome tax.

Williams-Santana incorporated is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with ittle business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2024 before any adjusting entrles or ciosing entrles were prepared. The income tax ate is 25% for all years. a. A five-year casuaity Insurance policy was purchased at the beginning of 2022 for $34,500. The full amount was debited to Insurance expense at the time. b. Effectlve January 1, 2024, the company changed the salvage value used in calculating depreciation for its office bullding. The bullding cost $616,000 on December 29,2013 , and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $120,000. Decilining real estate values in the area indicate that the salvage value will be no more than $30,000. c. On December 31, 2023, merchandise Inventory was overstated by $24,500 due to a mistake in the physical Inventory count using the periodic inventory system. d. The company changed Inventory cost methods to FIFO from LIFO at the end of 2024 for both financlal statement and Income tax purposes. The change will cause a $955.000 increase in the beginning inventory at January 1,2025 . e. At the end of 2023 , the company falled to accrue $16,300 of sales commissions eamed by employees during 2023 . The expense was recorded when the commissions were pald in early 2024. f. At the beginning of 2022 , the company purchased a machine at a cost of $710,000. Its useful life was estimated to be 10 years with no salvage value. The machine has been depreclated by the double-declining balance method. Its book value on December 31 . 2023, was $454,400. On January 1, 2024, the company changed to the straight-line method. g. Warranty expense is determined each year as 1% of sales. Actual payment experlence of recent years indicates that 0.70% is a better indication of the actual cost. Management effects the change in 2024. Credit sales for 2024 are $3,900,000; in 2023 they were $3,600,000