Answer:
$667,826
Explanation:
Straight Line depreciation is a method of depreciation in which the cost of the asset net of residual value is divided over useful life.
As per given data
Cost of building = $9,000,000
Residual Value = $1,000,000
Useful life = 25 years
Depreciation per year = ($9,000,000 - $1,000,000 ) / 25 years = $320,000
Net Book Value at beginning of 2018 = $9,000,000 - $320,000 = $8,680,000
Switched to Double Declining Method
In double declining method the double depreciation is charged on the asset's book value at the beginning of the year. The Depreciation is accelerated in this method.
Depreciation for 2018 = 2 x (Asset's book value at the beginning of the year - Salvage Value ) / Numbers of Useful life remaining
Depreciation for 2018 = 2 x ($8,680,000 - $1,000,000 ) / (25 - 2)
Depreciation for 2018 = 2 x ($8,680,000 - $1,000,000 ) / (25 - 2)
Depreciation for 2018 = $667,826
