1. On January 1, Year 1, Hardy Company bought a machine for $65,000. It had a useful life of 6 years and a salvage value of $5,000. On January 1, Year 3, Hardy determined that the estimated useful life was 5 years from the time the machine was bought with no salvage value. What is the straight-line depreciation for the year ended December 31, Year 3?

A. $10,000

B. $13,000

C. $13,333

D. $15,000

2. How should the effect of a change in accounting estimate be accounted for?

A. By retrospectively applying the change to amounts reported in financial statements of prior periods.

B. By reporting pro forma amounts for prior periods.

C. As a prior-period adjustment to beginning retained earnings.

D. By prospectively applying the change to current and future periods.