Response to the following questions:
1. Modified accelerated cost recovery system (MACRS) depreciation is allowed by the IRS but usually is not used in financial reporting. Why do you think this is the case?
2. When changing the estimate of the useful life of an asset, should depreciation expense for all the previous years be recalculated? If not, how do you account for a change in this estimate?
3. Why is it often necessary to recalculate the depletion rate for natural resources?