McDonald Company acquired machinery on January 1, 2009 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2014, McDonald estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by McDonald?
a. As a prior period adjustment
b. As the cumulative effect of a change in accounting principle in 2014
c. By setting future annual depreciation equal to one-sixth of the book value on January 1, 2014
d. By continuing to depreciate the machinery over the original fifteen year life
Answer: C