Williams-Santana. Inc. is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training In 2018, 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 2018 before any adjusting entries or closing entries were prepared. The income tax rate is 40% for all years a. A five-year casualty insurance policy was purchased at the beginning of 2016 for $36,500. The full amount was debited to insurance expense at the time. b Effective January 1. 2018, the company changed the salvage values used in calculating depreciation for its office building. The building cost $612,000 on December 29. 2007 and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000 c On December 31, 2017, merchandise inventory was overstated by $26.500 due to a mistake in the physical inventory count using d. The company changed inventory cost methods to FIFO from LIFO at the end of 2018 for both financial statement and income tax e. At the end of 2017 the company falled to accrue $15.800 of sales commissions earned by employees during 2017 The expense f At the beginning of 2016, the company purchased a machine at a cost of $750,000. Its useful life was estimated to be ten years g. Warranty expense is determined each year as of sales Actual payment experience of recent years indicates that 075%is a the periodic inventory system purposes. The change will cause a $975,000 increase in the beginning inventory at January 1, 2019 was recorded when the commissions were paid in early 2018 with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $480.000 On January 1. 2018, the company changed to the straight-line methood better Indication of the actual cost Management effects the change in 2018 Credit sales for 2018 are $4,300,000, in 2017 they were $4,000.000 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 necessay as a airect esuit of the change or error correction as well as any adjusting entry for 2018 relate tn the situarinn (Inscrihed Anv ta ff_rs sheild h Arth isted fr thro nh Income tax navable or Refund income tax g. Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 075% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $4,300,000; in 2017 they were $4,000.000. 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 2018 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 belovw Required 1 Required 2 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 Type of change c