Question
In 1993, Waterway Company completed the construction of a building at a cost of $2,380,000 and first occupied it in January 1994. It was estimated
In 1993, Waterway Company completed the construction of a building at a cost of $2,380,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $71,200 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $595,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $23,800. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
Using the straight line method annual depreciation from 1994 to 2003 is $57,720 a year.
Annual depreciation from 2004 to 2021 is $76,760 per year.
Compute the annual depreciation to be charged beginning with 2022. Answer is $28,785 I cannot figure out how they arrived at this answer.
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