A$21-8$ Change in Estimated Useful Life $($LO $21-1,21-6,21-8)$

Stacey Corp. has been depreciating equipment over a $10-$year life on a straight$-$line basis. The equipment, which cost $$28,600,$ was

purchased on $1$ January $201.$ It has an estimated residual value of $$7,600.$ On the basis of experience since acquisition, management

has decided in $205$ to depreciate it over a total life of $14$ years instead of $10$ years, with no change in the estimated residual value.

The change is to be effective on $1$ January $205.$ The $205$ financial statements are prepared on a comparative basis; $204$ and $205$

incomes before depreciation were $$54,100$ and $$56,400,$ respectively. Disregard income tax considerations.

Required:

$1-$a$.$ Analyze the effects of the change. $($Amounts to be deducted should be indicated by a minus sign.$)$