A building was purchased for $370,000 and depreciated for ten years on a straight-line basis under the assumption it would have a twenty-year life and a $10,000 salvage value. At the beginning of the building's eleventh year it was recognized the building had eight years of remaining life instead of ten and that at the end of the remaining eight years its salvage value would be $16,000. What amount of depreciation should be recorded in each of the building's remaining eight years?
What will be an ideal response?
| ($370,000 - $10,000)/20 = | $18,000 Original annual depreciation |
| $18,000 * 10 years = | $180,000 Accumulated depreciation after 10 years |
| $370,000 - $180,000 = | $190,000 Undepreciated cost after 10 years |
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What will be an ideal response?
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