(Change in accounting estimate, LO 2, 3, 6,7) On November 12, 2001 Griffon Inc.

(Griffon) purchased a new front-end loader for $275,000. Management estimated that the loader would have a useful life of eight years and a residual value of $25,000.

Near the end of fiscal 2006 management reassessed the useful life of the loader and decided that because the workload of the loader was much lower than was originally expected, its useful life would probably be about 12 years and the residual value of the loader would be about $10,000. Griffon’s year end is October 31 and the company uses straight-line amortization for this type of asset.

Required:

a. Prepare the journal entry to record the purchase of the loader in 2001.

b. What would be the amortization expense for the loader in 2002? Prepare the journal entry to record the amortization expense in 2002.

c. What would be the amortization expense for the loader in 2009? Prepare the journal entry to record the amortization expense in 2009.

d. Suppose the loader was sold in 2010 for $22,000. Prepare the journal entry to record the sale.