EX 10-15 Revision of depreciation

A building with a cost of $900,000 has an estimated residual value of $250,000, has an estimated useful life of 40 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 twenty-fourth year of use?
(c) If at the start of the twenty-fifth year it is estimated that the remaining life is nine years and that the residual value is $240,000, what is the depreciation expense for each of the remaining nine years?

Answer:
a. $16,250 [($900,000 – $250,000)/40]
b. $510,000 [$900,000 – ($16,250 × 24 yrs.)]
c. $30,000 [($510,000 – $240,000)/9 yrs.]

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