Question: On January 1 2009 Blizzards R Us purchased a snow blowing machine for

On January 1, 2009, Blizzards-R-Us purchased a snow-blowing machine for $73,000. The machine was expected to have a residual value of $5,000 at the end of its five-year useful life. On January 1, 2011, Blizzards-R-Us concluded that the machine would have a remaining useful life of six years with a residual value of $3,800.

1. Determine the revised annual depreciation expense for 2011 using the straight-line method.
2. Conceptual Connection: How does the revision in depreciation affect Blizzards-R-Us’s financial statements?

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