Canyon Company determined that the amortization rate on its patents is

unacceptably low due to current advances in technology. The entity decided at the

beginning of 2011 to decrease the estimated useful life on all existing patents from

10 years to 8 years. Patents were purchased on January 1, 2006 for P3,000,000.

The estimated residual value is zero.

Canyon Company decided on January 1, 2011 to change its depreciation method

for manufacturing equipment from an accelerated method to straight line method.

On January 1, 2011, the total historical cost of depreciable assets is P8,000,000

and the accumulated depreciation on those assets is P3,400,000. The expected

remaining useful life of depreciable assets on January 1, 2011 is 10 years and the

expected residual value is P200,000. What is the total charge against 2011 income

as a result of the accounting changes?

a. 940,000

b.960,000

c.627,500

d.647,500

Please show solution to guide me in answering. Thanks!