Wiliams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2012 by two talented engineers with ittle 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 entries or closing entries were prepared a. A five-year casualty insurance policy was purchased at the beginning of 2022 for $39.000. The full amount was debited to insurance experse at the time. b. Effective January 1, 2024, the company changed the salvage value used in calculating depreciation for its office bulding. The building cost $652000 on December 29.2013 , and has been depreciated on a straight-tine basis assuming a useful life of 40 years and a salvage value of $120,000 Declining 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 $29,000 due to a mistake in the physical inventory count using the periodic 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 $1,000,000 increase in the beginning inventory on January 1,2025 e. At the end of 2023 , the company falled to accrue $16.300 of sales commissions earned by employees during 2023. The expense was recorded when the commissions were paid in early 2024 1. At the beginning of 2022 , the company purchased a machine at a cost of $800,000. 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 $512,000. 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 indicates that 070% is a better indication of the actual cost. Management effects the change in 2024. Credit sales for 2024 are $4,800,000; in 2023 they were $4,500,000 Required: For each situation: 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 ary 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. (ignore tax effects) Journal entry worksheet 1 3 Record adjusting journal entry for 2024. Note: Enter debits before credits. Journal entry worksheet (1) 2 (2) Record entry necessary as a direct result of the change or error correction. Wiatan Fentar debits before credits. Journal entry worksheet 12 3 4 6 Record entry necessary as a direct result of the change or error correction. Note: Enter debits before credits. Journal entry worksheet 1 4 6 8 Record entry necessary as a direct result of the change or error correction. Note: Enter debits before credits. Journal entrv workshent wore: tnter debits before credits. Journal entry worksheet (1) 8 11 Record entry necessary as a direct result of the change or error correction. Notar Enter dahite before credits. Journal entry worksheet 178 9 Record adjusting journal entry for 2024. Note: Enter debits before credits
