On January 2, 2018, the business purchased a large piece of equipment for $410,000. At that time, you used straight line depreciation, with no salvage value to depreciate the equipment over 7 years. It is now January 2, 2021, you have already recorded depreciation for 2020. You realize that the estimate of useful life that you are using to calculate depreciation is inaccurate. You now estimate that the equipment will only be useful for 5 years from the date of acquisition.

You are to 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. Give a high-level overview on how you calculated the new depreciation expense and year end accumulated depreciation. Also, discuss how this change will affect prior years financial statements.