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Question - Bonobo's Inc. purchased machines for $450,000 which was estimated to have a useful life of 10 years with a salvage value of $20,000 on January 1, 2020. It depreciated the equipment using the straight-line method. On January 1, 2022, the company revised its estimates and determined that the total estimated useful life should be 15 years instead of 10 years and the salvage value should be revised to $10,000.
Instructions -
(1) Record the adjusting entry for depreciation at December 31, 2022.
(2) Briefly explain the accounting differences between revising estimates and changing accounting policies.
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