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Wiliams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little business training. In 2024 ,

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Wiliams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little 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 entres or closing entries were prepared. The income tax rate is 25% for all years. a. A five-year casualty insurance policy was purchased at the beginning of 2022 for $31,500. The full amount was debited to insurance expense at the time b. Effective January 1,2024 , the company changed the salvage value used in calculating depreciation for its office buirding. The building cost $592,000 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. Decining 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 $21,500 due to a mistake in the physical inventory count using the perlodic inventory system. d. The company changed inventory cost methods to FIFO from LifO at the end of 2024 for both financial statement and income tax purposes. The change will cause a $925,000 increase in the beginning inventory at January 1,2025 . e. At the end of 2023 , the company falled to accrue $15,700 of sales commissions earned by employees during 2023. The expense was recorded when the commissions were paid in early 2024 t. At the beginning of 2022 , the company purchased a machine at a cost of $650,000. Its useful life was estimated to be 10 years with no salvage value. The machine has been depreciated by the double-declining balance method. its book value on December 31. 2023, was $416.000 On January 1.2024, the company changed to the straight-line method 9. Warranty expense is determined each year as 1% of sales Actual payment experience of recent years inclicates that 0.70% is a better indication of the actual cost Management effects the change in 2024. Credit sales for 2024 are $3,300,000, in 202.3 they were $3,000,000 Required: For each situation 1. Identify whether it represents an accounting change or an elfor If an accounting change, identify the type of change. For accounting errors, choose Tor applicable' 2. Prepare any journal entry necessaty as a direct result of the change oc error conrection, as well as any acjusting entry for 2024 related to the situation described Any tax effects thould be acjusted for through income tax payable or Refund-income tax 1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable". 2. Prepare any 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 Refund-income tax. Complete this question by entering your answers in the tabs below. Prepare any 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 strould be adjusted for through Income tax payable or Refund-income tax. Note: It no entry is required for a transaction/event, select "No journal entry required" in the first account field

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