Carey Company Purchased a Machine on January 1, 2006, for $300,000

Multiple Choice

Carey Company purchased a machine on January 1, 2006, for $300,000. At the date of acquisition, the machine had an estimated useful life of six years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2009, Carey determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no salvage. An accounting change was made in 2009 to reflect this additional information.
-Assume that the direct effects of this change are limited to the effect on depreciation and the related tax provision, and that the income tax rate was 30% in 2006, 2007, 2008, and 2009. What should be reported in Carey's income statement for the year ended December 31, 2009, as the cumulative effect on prior years of changing the estimated useful life of the machine?

A) $0
B) $20,000
C) $30,000
D) $105,000