1. On January 1, 2018, B Coorp. purchases a machine for $12,000. The machine has a $2,000 salvage value and an estimated 5-year useful life. On March 1, 2021, B Corp. changes the estimated usefulness life to 7 years (additional 2 years). B Corp records depreciation expense at the end of each year. How should B Corp calculate depreciation.

a. Update 2018, 2019, and 2020 financial statements assuming a 7-year useful life to begin with b. Update the depreciation calculation starting in 2021.

2. On December 31, 2018, D Corp's machine has a carrying amount of $100,000. The fair value less selling cost of the machine is $90,000. The value-in-use of the machine is $103,000. Which of the following is true regarding impairment on December 31, 2018.

a. there is no impairment b. there is a $3,000 impairment c. there is a $10,000 impairment d. there is a $13,000 impairment