Complete Problem 10.5 from the textbook.

Use Microsoft Excel to show the calculations of depreciation prior to and after the recommended changes. In addition, discuss the impact to the income statement and balance sheet if these changes are approved. Finally, provide a recommendation on whether the changes should be made; use your calculations to support your position.

10.5 Effects of Changes in Estimates on Depreciation Expense At the end of each year, Patty Chu, the chief accountant at Rex Lin Enterprises, a Singaporebased trading company, reviews longterm assets at the end of each year to determine whether changes are called for in how these assets are depreciated. In December 2017, her attention focused on two assets in particular:

Date acquired Cost Accumulated depreciation end of 2017 Useful life Residual Value

Warehouse 1/1/13 $200,000 $50,000 25 years $10,000

Building 1/1/12 $1,600,000 $228,000 40 years $100,000

Date acquired Cost Accumulated depreciation end of 2017 Useful life Residual value Warehouse 1/1/13 $200,000 $50,000 25 years $10,000 Building 1/1/12 1,600,000 228,000 40 years 100,000