Answer:
$613,077
Explanation:
Calculation for the depreciation on the building for 2021
First step is to calculate the depreciation expense for the year 2019 and 2020 using this formula
Depreciation expense = (Purchase price - Residual value) ÷ (Useful life)
Let plug in the formula
Depreciation expense= ($9,300,000 - $1,300,000) ÷ (20 years)
Depreciation expense= ($8,000,000) ÷ (20 years)
Depreciation expense= $400,000
Second step is to calculate the book value for the year 2021 using this formula
Book value = Purchase price - Depreciation expenses *2 years
Let plug in the formula
Book value= $9,300,000 - $400,000 × 2
Book value= $8,500,000
Last step is to calculate the depreciation for 2021 using this formula
2021 Depreciation=(Book value-Residual value)÷Useful life
2021 Depreciation= ($8,500,000 - $530,000) ÷ (15 years - 2 years)
2021 Depreciation=$7,970,000÷13 years
2021 Depreciation= $613,077
Therefore the depreciation on the building for 2021 will be $613,077
