Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little business training. In 2021, 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 2021 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 2019 for $35,500. The full amount was debited to insurance expense at the time. b. Effective January 1, 2021, the company changed the salvage value used in calculating depreciation for its office building. The building cost $614,000 on December 29, 2010, and has been depreciated on a straight-line basis assuming a useful life of 40 and a salvage value of $110,000. Declining real estate values in the area indicate that the salvage value will be no more than $27,500. c. On December 31, 2020, merchandise inventory was overstated by $25,500 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 2021 for both financial statement and income tax purposes. The change will cause a $965,000 increase in the beginning inventory at January 1, 2022. e. At the end of 2020, the company failed to accrue $16,500 of sales commissions earned by employees during 2020. The expense was recorded when commissions were paid in early 2021. f. At the beginning of 2019, the company purchased a machine at a cost of $730,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2020, was $467,200. On January 1, 2021, 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 0.80% is a better indication of the actual cost. Management effects the change in 2021. Credit sales for 2021 are $4,100,000; in 2020 they were $3,800,000. 1 2. Prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2021 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund-income tax. I finished like this, please help me to correct it. Thank you. Required 1 Required 2 Prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2021 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund-income tax. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No General Journal Debit Credit Transaction a(1) 1 21,300 Prepaid insurance Retained earings Income tax payable 21,300 X 2 a(2) Insurance expense 7,100 Prepaid insurance 7.100 3 b(1) No journal entry required 0 4 b(2) 15,445 Depreciation expense Accumulated depreciation 15,445 X 5 c(1) Retained earnings Refund -income tax OOO Inventory 6 > c(2) No journal entry required 7 d(1) Inventory Income tax payable Retained earnings 8 d(2) No journal entry required > 9 e(1) Retained earnings Refund - income tax Compensation expense 10 e(2) No journal entry required OL 11 f(1) > No journal entry required 12 f(2) Depreciation expense Accumulated depreciation 12 f(2) Depreciation expense Accumulated depreciation 00 13 g(1) No journal entry required 14 g(2) Warranty expense Estimated warranty liability