1. On January 1, 2016, Dawson Corp. bought machinery for $800,000. They used double declining balance depreciation for this asset, with an estimated life of 8 years, and an estimated $200,000 residual value. At the beginning of 2019, Dawson decided to change to the straight-line method of depreciation for this equipment and treated the change as a change in estimate. For the calendar year 2019, the depreciation expense for this machinery is:

1. $100,000
2. $92,500
3. $75,050
4. $27,500

2. Which of the following subsequence events (Post-statement of financial position events) would require an adjustment of the accounts before issuance of the financial statements?

1. Major losses as a result of a fire in the companys plant
2. Decline in the fair value of investments
3. Loss in accounts receivable (on the books at statement of financial position date) resulting from customers bankruptcy.
4. Lawsuit arising from a customers injury due to defective product.