Descrlbed below are sIx Independent and unrelated situations Involving accounting changes. Each change occurs durlng 2024 before any adjusting entrles or closing entrles were prepared. Assume the tax rate for each company is 25% In all years. Any tax effects should be adjusted through the deferred tax llability account. a. Fleming Home Products Introduced a new IIne of commerclal awnings in 2023 that carry a one-year warranty agalnst manufacturer's defects. Based on Industry experlence, warranty costs were expected to approximate 3% o sales. Sales of the awnings in 2023 were $4,400,000. Accordingly, warranty expense and a warranty llability of $132,000 were recorded In 2023. In late 2024, the company's claims experlence was evaluated, and It was determIned that claims were far fewer than expected: 2% of sales rather than 3%. Sales of the awnIngs in 2024 were $4,900,000, and warranty expenditures in 2024 totaled $111,475. b. On December 30, 2020, Rival Industrles acquired Its office bullding at a cost of $1,180,000. It was depreclated 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 bullding will have a salvage value at that time of $790,000. c. Hobbs-Barto Merchandising, Incorporated, changed Inventory cost methods to LIFO from FIFO at the end of 2024 for both financlal statement and Income tax purposes. Under FIFO, the Inventory at January 1, 2024, Is $780,000. d. At the beginning of 2021, the Hoffman Group purchased office equipment at a cost of $429,000. Its useful IIfe was estimated to be 10 years with no salvage value. The equipment was depreclated by the sum-of-the-years'-diglts method. On January 1,2024 , the company changed to the straight-line method. e. In November 2022, the State of Minnesota filed sult against Huggins Manufacturing Company, seekIng penalties for violations of clean alr laws. When the financlal statements were issued in 2023, Huggins had not reached a settlement with state authorltles, but legal counsel advised Huggins that it was probable the company would have to pay $290,000 in penaltles. Accordingly, the following entry was recorded: Late In 2024, a settlement was reached with state authoritles to pay a total of $449,000 in penaltles. f. At the beginning of 2024 , Jantzen Specialties, which uses the sum-of-the-years'-digits method, changed to the stralght-line method for newly acquired bulldings and equipment. The change Increased current year net earnings by $544,000