Choice "B" is correct. A change in the estimated useful life of a fixed asset is accounted for prospectively, in current and future periods only. From Year 1 through Year 5, annual depreciation of $4,000 ($48,000 / 12 years) was recorded on the machine, for total accumulated depreciation of $20,000 ($4,000 per year x 5 years). On January 1, Year 6, the net book value of the machine was $28,000 ($48,000 cost - $20,000 accumulated depreciation). The extension of the machine's useful life by 3 years means that the total useful life of the asset becomes 15 years, with 10 years remaining at the beginning of Year 6. As a result, depreciation expense of $2,800 ($28,000 net book value / 10 years) is recorded in Year 6.