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Marjorie corporation acquired a building on January 1st 2018 for $660,000 the building had an estimated...

Marjorie corporation acquired a building on January 1st 2018 for $660,000 the building had an estimated useful life of 15 years and had an estimated residual value of $60,000. on January 1st 2020 Marjorie corporation determined that the building could only be used for a total of 12 years and there would be no residual value. compute depreciation expense for the year ending December 31st 2020 if Marjorie corporation uses straight line depreciation

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Answer:
Depreciation expense per Year
              = (Cost (-) Residual value ) / Useful Life
              = ( $ 660,000 (-) $ 60,000 ) / 15 Years
              = $ 600,000 / 15 Years		 $ 40,000
Book value at the end of Dec. 2019
            = Cost (-) Accumulated Dep.
            = $ 660,000 (-) [ $ 40,000 x 2 Years ]
            =   $ 660,000 (-) $ 80,000		 $ 580,000
Assuming Total Life :
Depreciation expense for Year 2020
              = (Cost (-) Residual value ) / Useful Life
              = ($ 580,000 (-) $ 0 ) / 12 Years
              = $ 580,000 / 12 Years		 $ 48,333
(or)
Assuming Balance Life :
Depreciation expense for Year 2020
              = (Cost (-) Residual value ) / Useful Life
              = ($ 580,000 (-) $ 0 ) / (12 (-) 2 ) Years
              = $ 580,000 / 10 Years		 $ 58,000

ekkarill92 answered 2 years ago
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