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Question
Pharoah Company purchased a machine on January 1, 2016, for $1010000. At the date of acquisition, the machine had an estimated useful life of 6 years with no salvage. The machine is being depreciated on a straight-line basis.
On January 1, 2019, Pharoah determined, as a result of additional information, that the machine had an estimated useful life of 8 years from the date of acquisition with no salvage. An accounting change was made in 2019 to reflect this additional information.
What is the amount of depreciation expense on this machine that should be charged in Pharoah's income statement for the year ended December 31, 2019?
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