At the beginning of 2014, Robotics Inc. acquired a manufacturing facility for $1

Question

At the beginning of 2014, Robotics Inc. acquired a manufacturing facility for $12.6 million. $9.6 million of the purchase price was allocated to the building. Depreciation for 2014 and 2015 was calculated using the straight-line method, a 25-year useful life, and a $1.6 million residual value. In 2016, the estimates of useful life and residual value were changed to 20 years and $560,000, respectively.

What is depreciation on the building for 2016? (Enter your answer in whole dollars.)

At the beginning of 2014, Robotics Inc. acquired a manufacturing facility for $12.6 million. $9.6 million of the purchase price was allocated to the building. Depreciation for 2014 and 2015 was calculated using the straight-line method, a 25-year useful life, and a $1.6 million residual value. In 2016, the estimates of useful life and residual value were changed to 20 years and $560,000, respectively.

Explanation / Answer

SLM Cost of Machine    9,600,000.00 Salvage Value    1,600,000.00 Life in years                  25.00 Particulars 2014 2015 Opening Balance    9,600,000.00     9,280,000.00 Depreciation(9,600,000-1,600,000)/25        320,000.00         320,000.00 Closing balance    9,280,000.00     8,960,000.00 Balance at beginning of 2016    8,960,000.00 Residual Value        560,000.00 Remaining Life                    20.00 Dep for 2016 = (8960,000-560000)/20        420,000.00

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