A company purchased a building for $900,000 on January 1,Year 1.The building is being depreciated over 40 years with an estimated residual value of $100,000.What will be the book value of the building in ten years?

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Quizplus · Accepted Answer

The annual depreciation expense is calculated as (Cost - Residual Value) / Useful Life = ($900,000 - $100,000) / 40 = $20,000 per year. Over ten years, the total depreciation is $20,000 * 10 = $200,000. Therefore, the book value after ten years is Cost - Accumulated Depreciation = $900,000 - $200,000 = $700,000.

A Company Purchased a Building for $900,000 on January 1,Year