Williams$-$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 entries 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 $$37,500.$ 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

building. The building cost $$640,000$ 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.$ 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 $$27,500$ 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 $$985,000$ increase in the beginning inventory at January $1,$

e$.$ At the end of $2023,$ the company failed to accrue $$16,900$ of sales commissions earned by employees during

The expense was recorded when the commissions were paid in early $2024.$

f$.$ At the beginning of $2022,$ the company purchased a machine at a cost of $$770,000.$ 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 $$492,800.$ On January $1,2024,$ the company changed to the

straight$-$line method.

g$.$ Warranty expense is determined each year as $1\%$ of sales. Actual payment experience of recent years indicates

that $0\mathrm{.}70\%$ is a better indication of the actual cost. Management effects the change in $2024.$ Credit sales for $2024$

are $$4,500,000$; in $2023$ they were $$4,200,000.$

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 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.