Question
In 1998 Crane Company completed the construction of a building at a cost of 2,025,000 and first occupied it in January 1999. It was estimated
In 1998 Crane Company completed the construction of a building at a cost of 2,025,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of 60,000 at the end of that time.
Early in 2009, an addition to the building was constructed at a cost of 505,000. A 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 20,250.
In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate.
a. using straight line method, compute the annual depreciation that would be charged from 1999 to 2008
b. compute the annual depreciation that would be charged from 2008 through 2026
d. compute the annual depreciation to the charged beginning with 2027
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