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kupik [55]
3 years ago
11

At the beginning of 2016, robotics inc. acquired a manufacturing facility for $13.1 million. $10.1 million of the purchase price

was allocated to the building. depreciation for 2016 and 2017 was calculated using the straight-line method, a 20-year useful life, and a $2.1 million residual value. in 2018, the estimates of useful life and residual value were changed to 15 total years and $610,000, respectively. what is depreciation on the building for 2018?
Physics
1 answer:
ki77a [65]3 years ago
4 0

$ 376153 is depreciation on the building for 2018.

<u>Explanation:</u>

Given data:

Original cost = $13.1 million

Residual value = $2.1 million

Useful life = 20 -year  

Depreciation on the building for 2016 = =\frac{\text {original cost-residual value}}{\text { Useful life }}

By substituting the given values, we get,

        =\frac{(\$ 13.1 \text { million }-\$ 2.1\text { million) } }{20 \text { years }}=\frac{11.1 \text { million }}{20 \text { years }} = 5500000

Depreciation for 2016 $5500000

Depreciation for 2017 $5500000

Depreciation at Dec 31, 2017 $ 5500000

In 2018, the estimates of useful life and residual value were changed to 15 years and $610000, but 2 yrs have already passed, so there're 13 more yrs to go.

Depreciation on the building for 2018,

      =\frac{\text { book value at the end of } 2016-\text {residual value}}{\text { useful life }}

        = =\frac{\$ 5500000-\$ 610000}{13}=\frac{4890000}{13}=\$ 376153

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