CHANGE IN EXPECTED LIFE. The 1985 annual report for Union Carbide included the following information:

In the third quarter of 1985 Union Carbide revised, retroactive to January 1, 1985, the estimated useful lives used to depreciate the cost of machinery and equipment.

Machinery and equipment lives, which formerly ranged from 10 to 20 years, were shortened to 10 to 15 years.

REQUIRED:

1. What would be the effect on 1985 income of the change in estimated lives for the depreciable assets?

2. If Union Carbide continues to invest in depreciable assets, what will be the effect of this change on future income statements?