Described below are six independent and unrelated situations involving accounting changes. Each change occurs during 2021 before any adjusting entries or closing entries were prepared. Assume the tax rate for each company is 25% in all years. Any tax effects should be adjusted through the deferred tax liability account. B. Fleming Home Products introduced a new line of commercial awnings in 2020 that carry a one-year warranty against manufacturer's defects. Based on industry experience, warranty costs were expected to approximate 3% of sales. Sales of the awnings in 2020 were $3.000,000. Accordingly, warranty expense and a warranty liability of $90.000 were recorded in 2020 . In late 2021, the company's claims experience was evaluated, and it was determined that claims were far fewer than expected 2% of sales rather than 3%. Sales of the awnings in 2021 were $3,500,000, and warranty expenditures in 2021 totaled $79.625. b. On December 30.2017. Rival Industries acquired its office building at a cost of $900.000. It was depreciated on a straight-line basis assuming a useful iffe of 40 years and no salvage value. However. plans were finalized in 2021 to relocate the company headquarters at the end of 2025 . The vacated office building will have a salvage value at that time of $650,000. c. Hobbs-Barto Merchandising. Inc. changed inventory cost methods' to LIFO from FIFO at the end of 2021 for both financial statement. and income tax purposes. Under FIFO, the inventory at January 1, 2021, is $640,000. d. At the beginning of 2018 , the Hoffman Group purchased office equipment at a cost of $275,000 - its useful life was estimated to be 10 years with no salvage value. The equipment was depreciated by the sum-of-the-years'-digits method. On January 1, 2021, the company changed to the straight-line method. e. In November 2019, the State of Minnesota filed suit against Huggins Manufacturing Company, seeking penalties for violations of clean air laws. When the financial statements were issued in 2020, Huggins had not reached a settlement with state authorities, but legal counsel advised Huggins that it was probable the company would have to pay $150,000 in penalties. Accordingly, the following entry was recorded: Late in 2021: a settlement was reached with state authorities to pay a total of $295.000 in-penalties. f. At the beginning of 2021 . Jantzen Specialties, which uses the sum-of-theyears'-digits method, changed to the straight-line method for newly acquired buildings and equipment. The change increased current year net earnings by $390,000. Required: For each situation: 1. Identify the type of change 2. Prepare any journal entry necessary as a direct result of the change, as well as any adjusting entry for 2021 related to the situation described. Oomplete this question by entering your answers in the tabs below. Identify the type of change: a. Feming Home Products introduced a new line of commercial awnings in 2020 that carry a one-year warranty against manufacturet's defects Based on industry experience, warranty costs were expected to approximate 3% of sales. Sales of the awnings in 2020 were $3,000,000. Accordingly. warranty expense and a warranty liability of $90.000 were recorded in 2020 . In late 2021, the company's claims experience was evaluated, and it was determined that claims were far fewer than expected: 2% of Sales rather than 3%. Sales of the awnings in 2021 were $3,500.000, and warranty expenditures in 2021 totaled $79.625. b. On December 30,2017 . Rival Industries acquired its office building at a cost of $900,000. It was depreciated on a straight-line basis assuming a useful iffe of 40 years and no salvage value. However, plans were finalized in 2021 to relocate the company headquarters at the end of 2025 . The vacated office building will have a salvage value at that time of $650,000. C. Hobbs-Barto Merchandising. Inc, changed inventory cost methods to LIFO from FIFO at the end of 2021 for both financial statement and income tax purposes. Under FIFO, the inventory at January 1, 2021, is $640,000 d. At the beginning of 2018, the Hoffman Group purchased office equipment at a cost of $275.000. Its useful life was estimated to be 10 years with no salvage value. The equipment was depreciated by the sum-of-the-years-digits method. On January 1 , 2021, the company changed to the straight-line method. e. In November 2019, the State of Minnesota filed suit against Huggins Manufacturing Company. seeking penalties for violations of clean air laws . When the financial statements were issued in 2020. Huggins had not reached a settlement with state authorities, but legal counsel advised Huggins that it was probable the company would have to pay $150.000 in penalties. Accordingly, the following entry was recorded: Loss-litigation tiability-1itigation 150,698158,6ed Latein 2021, a setlement was reached with state authon ties to pay a total of $295.000 in penalties 7. At the beginning of 2021 , Jarizen Speciaities, which uses the sum-of-the-years -digits method, changed to the straight-line metriod for newly arquired buldings and equipment. The change increased current year net eamings by 3390,000 . Required: Foreach situation 1.. dentifytife type of change: 2. Preperie any iournal enty necessary as a direct resuit of the change, as well as any adjusting entry for 202 li elated to alle cituation described. Complete this question by entering your answers in the tabs below. Reguriad 1 fsculed 2 Jounal entry worksheet