Please do not give solution in image format and fast answering please & Please Proper explain steps by Step Williams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2012 by two talented engineers withlittle business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the followingfacts 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 $30,500. The full amount was debited toinsurance expense at the time.b. Effective January 1, 2024, the company changed the salvage value used in calculating depreciation for its office building. Thebuilding cost $574,000 on December 29, 2013, and has been depreciated on a straight-line basis assuming a useful life of 40 yearsand 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, 2023, merchandise inventory was overstated by $20,500 due to a mistake in the physical inventory count usingthe 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 taxpurposes. The change will cause a $915,000 increase in the beginning inventory on January 1, 2025.e. At the end of 2023, the company failed to accrue $14,600 of sales commissions earned by employees during 2023. The expensewas recorded when the commissions were paid in early 2024.f. At the beginning of 2022, the company purchased a machine at a cost of $630,000. Its useful life was estimated to be 10 years withno salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31,2023, was $403,200. 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 0.80% is abetter indication of the actual cost. Management effects the change in 2024. Credit sales for 2024 are $3,100,000; in 2023 theywere $2,800,000.Required:For each situation:1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. Foraccounting errors, choose "Not applicable".No12345678910111213Transactiona(1)14a(2)b(1)b(2)c(1)c(2)d(1)d(2)e(1)e(2)f(1)f(2)g(1)Prepaid insuranceRetained earningsg(2)Insurance expensePrepaid insuranceNo journal entry requiredDepreciation expenseAccumulated depreciationRetained earningsInventoryNo journal entry required.InventoryRetained earningsNo journal entry requiredRetained earningsInventoryNo journal entry requiredNo journal entry requiredGeneral JournalDepreciation expenseAccumulated depreciation.No journal entry requiredWarranty expenseWarranty liability000043 3✔33333✔>>x››✔♥✔✔Debit30,500 >30,500 X464,00020,500915,000✔20,500X72,576 XCredit310,000 X30,50030,500 X464,000 X20,500•2. Prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2024related to the situation described. (Ignore tax effects.)♥I just need help with the journal entries, I've posted this same question a couple times already and cannot figure it out and am running out of questions so please help me correctly. I appreciate it!915,00020,50072,576 X310,000

Journal entry is an art of recording, classifying and summarizing business transactions into…

lliams-Santana Incorporated is a manufacturer of high-tech industrial parts that was started in 2012 by two talented engineers with le business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the following ts were discovered. The audit occurred during 2024 before any adjusting entries or closing entries were prepared. A five-year casualty insurance policy was purchased at the beginning of 2022 for $30,500. The full amount was debited to insurance expense at the time. Effective January 1, 2024, the company changed the salvage value used in calculating depreciation for its office building. The building cost $574,000 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 $110,000. Declining real estate values in the area indicate that the salvage value will be no more than $27,500. On December 31, 2023, merchandise inventory was overstated by $20,500 due to a mistake in the physical inventory count using the periodic inventory system. 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 $915,000 increase in the beginning inventory on January 1, 2025. At the end of 2023 the company failed to accrue $14.600 of sales commissions earned hy employees during 2023 The evnence No 1 2 3 4 5 6 7 8 9 Transaction a(1) a(2) b(1) b(2) c(1) c(2) d(1) d(2) (1) Prepaid insurance Retained earnings Insurance expense Prepaid insurance No journal entry required Depreciation expense Accumulated depreciation Retained earnings Inventory No journal entry required Inventory Retained earnings No journal entry required General Journal Retained earnings Inventory • • • • • • • • • • Ⓒ x Debit 30.500 € 30,500 ✪ 464,000 20.500 915.000 20,500 Credit 30.500 € 30,500 € 464,000 20,500 915,000 20.500

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Activities Required In Completing A Quality Audit

Section: Chapter Questions

Problem 87RSCQ