Quayle Company acquired machinery on January 1, 2002 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2007, Quayle estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by Quayle?

By continuing to amortize the machinery over the original fifteen year life

To account for the change in estimated remaining life of the machinery by Quayle Company, it should be treated as a change in accounting estimate, which means the original estimate needs to be revised. Here's how Quayle should account for this change:

1. Determine the carrying value of the machinery on January 1, 2007. This is the original cost of the machinery minus accumulated depreciation up to that date.

2. Calculate the revised annual depreciation expense. Divide the carrying value of the machinery by the revised remaining life (6 years in this case).

3. Adjust the accumulated depreciation on the machinery. The difference between the original accumulated depreciation and the revised annual depreciation expense should be recorded as an adjustment to accumulated depreciation on January 1, 2007.

4. Record the entry: Debit Accumulated Depreciation for the adjustment amount and Credit Depreciation Expense for the same amount.

Note that the change in estimated remaining life does not affect the salvage value as it remains unrevised. Also, this change in estimate should be applied prospectively, meaning it affects future depreciation expenses but does not require adjustment of previously recorded depreciation expenses.

It's important to consult the specific accounting standards or guidelines applicable in your jurisdiction or seek professional advice to ensure accurate and compliant accounting treatment for this change.