Prepare the necessary journal entries at December $31,2023,$ to record the above corrections and changes as

appropriate. The books are still open for $2023.$ Because Carla Vista has not yet recorded its $2023$ income tax

expense and payable amounts, you may ignore tax effects for the current year. Carla Vista's income tax rate is

$25\%.$ Assume that Carla Vista applies the taxes payable method of accounting for income taxes. $($List all

debit entries before credit entries. Credit account titles are automatically indented when the amount

is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and

enter $0$ for the amounts.$)$

No$.$ Account Titles and Explanation

Debit

Credi

Sales Commission Expense

Sales Commission Payable

Retained Earnings

Inventory

Accumulated Depreciation $-$ Equipment

Depreciation Expense

No Entry

$]$Carla Vista Company Limited, a small company following ASPE, is adjusting and correcting its books at the

end of $2023.$ In reviewing its records, it compiles the following information.

Carla Vista has failed to accrue sales commissions payable at the end of each of the last two years, as

follows $($the correct amounts were paid$)$:

Dec. $31,2022,$$$6,040$

Dec. $31,2023,$$$3,900$

In reviewing the December $31,2023$ inventory, Carla Vista discovered errors in its inventory$-$taking

procedures that have caused inventories for the past three years to be incorrect, as follows:

Dec. $31,2021,$ Understated $$23,600$

Dec. $31,2022$ Understated $$25,400$

Dec. $31,2023,$ Overstated $$9,800$

Carla Vista has already made an entry that recognized the incorrect December $31,2023$ inventory

amount.

In $2023,$ Carla Vista changed the depreciation method on its office equipment from double$-$

declining$-$balance to straight$-$line because of a change in the pattern of benefits received. The

equipment had an original cost of $$192,000$ when purchased on January $1,2021.$ At that time, it was

estimated that the office equipment had an eight$-$year useful life and no residual value. Depreciation

expense recorded prior to $2023$ under the double$-$declining$-$balance method was $$84,000.$ Carla

Vista has already recorded $2023$ depreciation expense of $$27,000$ using the double$-$declining$-$

balance method.

Before $2023,$ Carla Vista accounted for its income from long$-$term construction contracts on the

completed$-$contract basis because it was unable to reliably measure the degree of completion or the

estimated costs to complete. Early in $2023,$ Carla Vista changed to the percentage$-$of$-$completion

basis for financial accounting purposes. The change was a result of experience with the projects and

improved ability to estimate the costs to completion and therefore the percentage complete. The

completed$-$contract method will continue to be used for tax purposes. Income for $2023$ has been

recorded using the percentage$-$of$-$completion method. The following information is available:

Pre$-$Tax Income

Percentage$-$of$-$

Completion

Prior to $2023$

Completed$-$

Contract