Question

Calculate the annual depreciation for the building prior to adjustment at the end of the fiscal year using the straight-line method.

a) $20,000
b) $18,000
c) $15,000
d) $25,000

Answer 1

The annual depreciation for the building prior to adjustment at the end of the fiscal year using the straight-line method is $2.25 million.

Step-by-step explanation:

The annual depreciation for the building prior to adjustment at the end of the fiscal year using the straight-line method can be calculated as follows:

Initial value of the building = $15 million
Depreciation rate = 15%
Depreciation expense = Initial value of the building × Depreciation rate
Annual depreciation = Depreciation expense = $15 million × 15% = $2.25 million

Therefore, the annual depreciation for the building prior to adjustment at the end of the fiscal year using the straight-line method is $2.25 million.