Accounting changes involve

(a) policies and

(b) estimates. Using these letters and the letter

(c) for error corrections, identify each of the following types of change:

a. A lessor discovers, while a long-term capital lease term is in progress, that an estimated material unguaranteed residual value of the leased property has probably become zero.

b. After five years of use, an asset originally estimated to have a 15 -year total life is now to be depreciated on the basis of a 22 -year total life.

c. Because of inability to estimate reliably, a contractor began business using the completed-contract method. Now that reliable estimates can be made, the percentage of completion method is adopted.

d. Office equipment purchased last year is discovered to have been debited to office expense when acquired. Appropriate accounting is to be applied at the discovery date.

e. A company that used \(1 \%\) of sales to predict its bad debt expense discovers losses are running higher than expected and changes to \(2 \%\).