Change in Accounting Estimates Kinslow Company purchased a warehouse for $7,200,000 on January 1, 1989. The company uses straight-line depreciation and concluded it should depreciate the building over 30 years and use an estimated scrap value of $1,800,000. On January 1, 2001, Kinslow decided it needed to change the total estimated life of the building to 25 years and the estimated scrap value to $1,140,000.

a. What amount of depreciation expense should be recorded for 2000?

b. What should be the balance in accumulated depreciation at December 31, 2000?

c. What amount of depreciation expense should be recorded for 2001?

d. What is the impact of the changes in accounting estimate on reported net income for 2001?

e. What balance in accumulated depreciation should be reported at December 31, 2001?