Krafty Kris, Inc., discovered the following errors after the 2014 financial statements were issued:
a. A major supplier shipped inventory valued at $8,550 to Krafty Kris on consignment. This merchandise was mistakenly included in the inventory taken by Krafty Kris on December 31, 2013. (Goods shipped on consignment are the property of the consignor and should be included in its inventory.)
b. Krafty Kris renewed its liability insurance policy on October 1, 2013, paying a $36,000 premium and debiting Insurance expense. No further entries have been made. The premium purchased insurance coverage for a period of 36 months.
c. Repair expense was debited at the time equipment was purchased for $100,000 on January 8, 2014. The equipment has a life of five years; its salvage value is considered immaterial. Krafty uses straight-line depreciation method.

Required:
1. Prepare journal entries to correct these errors. Ignore income taxes.
2. Assuming that these errors remain uncorrected, explain their effects on the 2015 financial statements issued by Krafty Kris, Inc.