Answer:
$511,667
Explanation:
The computation of the depreciation expense for 2019 and 2020 is shown below:
= (Purchase price - residual value) ÷ (useful life)
= ($10,500,000 - $2,500,000) ÷ (25 years)
= ($8,000,000) ÷ (25 years)
= $320,000
The depreciation in this method is the same for the rest of the useful life
Now the book value for 2021 would be
= Purchase price - depreciation for 2 years
= $10,500,000 - $320,000 × 2
= $9,860,000
Now the depreciation for 2021 would be
= ($9,860,000 - $650,000) ÷ 18 years
= $511,667
Based on the information given the depreciation on the building for 2021
is: $511,667.
First step
Depreciation for 2019 and 2020
Depreciation as per Straight Line Method = (Original Cost - Residual Value) / Useful Life
Depreciation as per Straight Line Method = ($ 10,500,000 - $ 2,500,000) / 25
Depreciation as per Straight Line Method =$320,000
Second step
Carrying Value at the Beginning of Year 2021
Original Cost $ 10,500,000
Less : Accumulated Depreciation $640,000
($320,000 ×2 Year)
Carrying Value at the beginning of 2021 $9,860,000
Third step
Depreciation for 2021
Depreciation = (Carrying Value - Revised Estimated Residual Value) / Revised Remaining Useful Life
Depreciation = ($9,860,000 - $ 650,000) / 18 Years
Depreciation = $ 9,210,000 / 18 Years
Depreciation = $511,667
Inconclusion the depreciation on the building for 2021 is: $511,667.
Learn more here:https://brainly.com/question/19953315
