Depreciation expense for the most recent fiscal year on equipment purchased a few years ago is $10,000. The balance sheet at the end of the same year disclosed the following: Equipment Cost $300,000; Accumulated Depreciation 40,000; NBV $260,000. The asset is not expected to have a salvage value and the firm depreciates the asset on the straight-line basis. In March of the next year (the year of change), the firm decided to reduce the original total useful life 20% and that a salvage value of $30,000 is a reasonable estimate. What is depreciation in the year of the change?

Select one:

a. $12,500

b. $12,000

c. $10,000

d. $11,500

e. $13,000