Revision of Depreciation A building with a cost of $240,000 has an estimated res

Question

Revision of Depreciation A building with a cost of $240,000 has an estimated residual value of $96,000, has an estimated useful life of 18 years, and is depreciated by the straight-line method. a. What is the amount of the annual depreciation? b. What is the book value at the end of the tenth year of use? c. If at the start of the eleventh year it is estimated that the remaining life is 10 years and that the residual value is $70,000, what is the depreciation expense for each of the remaining 10 years?

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Cost of building       240,000.00 Residual Value         96,000.00 Estimated useful life                  18.00 a) Annual Depreciation = (240000 - 96000)/18            8,000.00 b) Total Depreciation for 10 Years = 8000 * 10         80,000.00 Book value at end of 10 Years = 240000 - 80000       160,000.00 c) Book value at end of 10 Years       160,000.00 Remaining life                  10.00 Residual value         70,000.00 Depreciation = (160000 - 70000)/10            9,000.00

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