On January 1, 2017, the business purchased a large piece of equipment for $500,000. At that time, you used straight line depreciation, with $50,000 salvage value to depreciate the equipment over 10 years. It is now January 1, 2021 and you realize that your estimate on the useful life was inaccurate. You now estimate that the equipment will only be useful for 7 years from the date of acquisition and salvage value revised to $20,000.

Write a message to the President, Janet Brown, describing how this change will affect the 2021 financial statements, both the income statement and balance sheet. Explain how you calculated the new depreciation expense and accumulated depreciation. Also, discuss how this change will affect prior years financial statements.