Prior to 2009, Trapper John Inc

Prior to 2009, Trapper John Inc. used sum-of-the-years'-digits depreciation on its store equipment. Beginning in 2009, Trapper John decided to use straight-line depreciation for these assets. The equipment cost $3 million when it was purchased at the beginning of 2007, had an estimated useful life of five years and no estimated residual value. To account for the change in 2009, Trapper John:

A) Would retrospectively report $600,000 in depreciation expense annually for 2007 and 2008, and report $600,000 in depreciation expense for 2009.
B) Would adjust accumulated depreciation and retained earnings for the excess charges made in 2007 and 2008,
C) Would report depreciation expense of $400,000 in its 2009 income statement.
D) None of these is correct.A change in depreciation methods is considered to be a change in accounting estimate that is achieved by a change in accounting principle, and handled prospectively.The computation is as follows: Book value at 1/1/09 = $3,000,000 [(5/15 $3,000,000) + (4/15 $3,000,000)
= $1,200,000.New depreciation = $1,200,000/3 = $400,000 per year for 2009-2011.