Assignment: Please help with the following problem by providing step by step calculations.
Purchased a machine on January 1, 2002, for $900,000. At the date of acquisition, the machine had an estimated useful life of six years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2005, Doral determined, as a result of additional information, that the machine had an estimate useful life of eight years from the date of acquisition with no salvage. An accounting change was made in 2005 to reflect this additional information.
What is the amount of depreciation expense on this machine that should be charged in Doral's income statement for the year ended December 31, 2005?
a. $225,000.
b. $90,000.
c. $112,500.
d. $180,000.