$1.$ Identify the type of change.

$2.$ Prepare any journal entry necessary as a direct result of the change, as well as any adjusting

entry for $2024$ related to the situation described.

Problem $10$

Hamilton Manufacturing introduced a new line of industrial canopies in $2024$ that carry a one$-$

year warranty against manufacturer$$s defects. Based on industry experience, warranty costs were

expected to approximate $4\%$ of sales. Sales of the canopies in $2024$ were $$2,800,000.$

Accordingly, warranty expense and a warranty liability of $$112,000$ were recorded in $2024.$ In

late $2025,$ the company$$s claims experience was evaluated, and it was determined that claims

were far fewer than expected: $3\%$ of sales rather than $4\%.$ Sales of the canopies in $2025$ were

$$3,400,000,$ and warranty expenditures in $2025$ totaled $$76,000$