At the beginning of its fiscal year, Compton Company purchased a building for $680,000. At the end of the year, the building has a fair value of $590,000. Compton's accountant recorded depreciation expense of $90.000 for the decline in the building's value. The building's depreciable life is 30 years.

1. Why is this depreciation amount not correct?

2. What is the correct amount of annual depreciation?