intermediat accounting

PART C : Accounting Changes and Error Analysis (6 marks) 1- A machine with a four-year life was purchased on January 1, 2016. The machine cost $ 20,000 and has no expected salvage value. No depreciation was taken in 2016 and 2017. Assume the straight-line method for depreciation. 1.5 marks 2. An equipment purchased for $710,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been recorded for 7 years on a straight-line basis. In 2017 (year 8), it is determined that the total estimated life should be 15 years with a salvage value of $4,000 at the end of that time. 3 marks 3- As the company applies the IFRS, it changed from LIFO to the FIFO inventory costing method on January 2017. Inventory determined under LFO and FIFO for the period 2014-2016 is as follows.: 1.5 marks Year LIFO FIFO 2014 $230,000 180,000 2015 180,000 200,000 2016 360,000 365,000 Instructions: for each transaction indicate if it is an accounting error or an accounting change (specify the type of accounting change) and prepare the appropriate journal entries in 2017