If a company purchased a building for $200,000 and expects it to last 20 years with a salvage value of $20,000, what is the annual straight-line depreciation?

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$9,000
$10,000
$8,500
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Q: If a company purchased a building for $200,000 and expects it to last 20 years with a salvage value of $20,000, what is the annual straight-line depreciation?

Solution: Annual Depreciation = (Cost - Salvage Value) / Useful Life = ($200,000 - $20,000) / 20 = $9,000.

Steps: 7

Step 1: Identify the cost of the building, which is $200,000.
Step 2: Identify the salvage value of the building, which is $20,000.
Step 3: Identify the useful life of the building, which is 20 years.
Step 4: Calculate the total depreciation by subtracting the salvage value from the cost: $200,000 - $20,000.
Step 5: The result of the subtraction is $180,000.
Step 6: Divide the total depreciation by the useful life: $180,000 / 20.
Step 7: The result of the division is $9,000, which is the annual straight-line depreciation.

If a company purchased a building for $200,000 and expects it to last 20 years with a salvage value of $20,000, what is the annual straight-line depreciation?

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