Squid Roe,Inc

Multiple Choice

Squid Roe,Inc.'s $48,000 sushi bar was originally expected to be used for eight years with no residual value.Depreciation on the bar was $6,000 per year for the past two years.In the third year,management changed the estimated life of the bar to be a total of only six years instead of eight.What should Squid Roe do?

A) Go back and revise all previous years' depreciation expense to be $8,000 per year.
B) Revise the depreciation expense to be $9,000 for years three through six.
C) Continue to depreciate the bar at $6,000 per year and then show a loss when it removes the bar at the end of year six.
D) Disclose the new information in the notes to the financial statements,but do not change anything else.