Described below are six independent and unrelated situations involving accounting changes. Each change occurs during $2024$ before

ony odjusting entries or closing entries were prepored. Assume the tox rate for each compony is $25\%$ in all years. Any tox effects

should be odjusted through the deferred tox liability account.

a$.$ Fleming Home Products introduced a new line of commercial awnings in $2023$ that corry a one$-$year warranty against

manufacturer's defects. Based on industry experience, warranty costs were expected to opproximate $3\%$ of sales. Soles of the

awnings in $2023$ were $$3,000,000.$ Accordingly, warranty expense and a warranty liability of $$90,000$ were recorded in $2023.$ In

late $2024,$ the company's claims experience wos evaluated, and it was determined that claims were for fewer than expected: $2\%$

of sales rather than $3\%.$ Soles of the awnings in $2024$ were $$3,500,000,$ and worranty expenditures in $2024$ totaled $$79,625.$

b$.$ On December $30,2020,$ Rival Industries acquired its office building at a cost of $$900,000.$ It was depreciated on a straight$-$line

basis assuming a useful life of $40$ years and no salvage value. However, plans were finalized in $2024$ to relocate the company

headquarters at the end of $2028.$ The vacated office building will hove a salvage value at that time of $$650,000.$

c$.$ Hobbs$-$Barto Merchandising. Incorporated, changed inventory cost methods to LIFO from FIFO at the end of $2024$ for both

financial statement and income tox purposes. Under FIFO, the inventory at Jonusry $1,2024,$ is $$640,000.$

d$.$ At the beginning of $2021,$ the Hoffman Group purchosed office equipment at a cost of $$275,000.$ Its useful life wos estimated to

be $10$ years with no salvoge value. The equipment wos depreciated by the sum$-$of$-$the$-$years'$-$digits method. On January $1,2024,$

the company changed to the straight$-$line method.

e$.$ In November $2022,$ 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 $2023,$ Huggins hod not reached a settlement with state outhorities,

but legal counsel advised Huggins that it was probable the compony would have to pay $$150,000$ in penalties. Accordingly, the

following entry was recorded:

Late in $2024,$ a settlement was reached with state authorities to pay o total of $$295,000$ in penalties.

f$.$ At the beginning of $2024,$ Jantzen Specialties, which uses the sum$-$of$-$the$-$years'$-$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:

Identify the type of change.

Prepare any joumal entry necessary as a direct result of the change, as well as any adjusting entry for $2024$ related to the

situstion described.

Complete this question by entering your answers in the tabs below.

Identify the type of change.