Final answer:
The accumulated depreciation of Lake Co.'s machine at the end of 2013, factoring in the change to its useful life and salvage value, would be $556,000. None of the options given match this calculated number, and an error may be present in the question.
Step-by-step explanation:
The question asks about an accounting change related to the depreciation method for a machine owned by Lake Co. Initially, the machine was depreciated using the straight-line method with no salvage value over eight years. On January 1, 2013, the company changed its estimate to a six-year useful life from the date of acquisition and a salvage value of $96,000. To calculate the accumulated depreciation at the end of 2013, we need to account for three years of depreciation under the original estimate and one year under the revised estimate.
Under the original estimate, the annual depreciation would have been $1,056,000 divided by 8, which equals $132,000 per year. After three years, the accumulated depreciation would be $132,000 times 3, which equals $396,000. Starting with 2013, the revised annual depreciation is calculated by subtracting the salvage value ($96,000) from the cost ($1,056,000) and then dividing by the revised life (6 years), resulting in an annual depreciation of $160,000. Adding one year of the revised depreciation to the accumulated amount brings the total to $396,000 plus $160,000, which equals $556,000 at the end of 2013.
However, none of the options presented match this number. Given the options in the question, it seems there may be a typographical error, and none of them would be correct based on the calculation provided.