On January 2, year 1, Union Co. purchased a machine for
$264,000 and depreciated it by the straight-line method using an
estimated useful life of eight years with no salvage value. On January
2, year 4, Union determined that the machine had a useful
life of six years from the date of acquisition and will have a salvage
value of $24,000. An accounting change was made in year 4 to
reflect the additional data. The accumulated depreciation for this
machine should have a balance at December 31, year 4, of

(d) From 1/2/Y1 to 12/31/Y3, depreciation was recorded
using an eight-year life. Yearly depreciation was $33,000
($264,000 ÷ 8), and accumulated depreciation at 12/31/Y3 was
$99,000 (3 × $33,000). In year 4, the estimated useful life was
changed to six years total with a salvage value of $24,000.
Therefore, the 12/31/Y3 book value ($264,000 – $99,000 =
$165,000) is depreciated down to the $24,000 salvage value over
a remaining useful life of three years (6 years total – 3 years already
recorded). The year 4 depreciation expense is $47,000
[($165,000 – $24,000) ÷ 3], increasing accumulated depreciation
to $146,000 ($99,000 + $47,000).